Business & Finance
Business and FinanceBusiness and Finance 
Thu, December 17, 2009
Wed, December 16, 2009
MONTREAL, QUEBEC--(Marketwire - Dec. 16, 2009) - COGECO Inc. (TSX:CGO) today announced financial results that surpass projections for fiscal 2009 despite a write-down in the value of its European subsidiary.
- Consolidated operating revenue for 2009 grew by $144 million to total $1,272.8 million, a 13% increase over the previous year. Consolidated operating income before amortization(1) was up 18.5% to $532 million. This performance is due mainly to growth in revenue-generating units ("RGU"), rate increases and recent acquisitions in Canada.
- The Company recorded a net loss of $78.5 million for fiscal 2009. Net loss was affected by the impairment loss of $399.6 million recorded on Cogeco Cable's investment in Cabovisao. Net of related income taxes and non-controlling interest, the impairment loss reduced net income by $124 million. Furthermore, the net loss in the cable sector includes an unfavourable impact of $2 million from the utilization of Cabovisao's pre-acquisition tax losses and a favourable impact from the reduction of withholding and stamp tax contingent liabilities in the amount of $5.2 million, also related to Cabovisao, both net of non-controlling interest, and a favourable impact of $5.3 million from the Part II licence fee settlement agreement net of related income taxes and non-controlling interest. Excluding the effect of the impairment loss, adjusted net income for fiscal 2009 amounted to $37 million compared with $35 million in 2008.
- Free cash flow(1) reached $101 million, up 0.6 % over the previous year. Operating margin increased to 42.5% from 40.5%.
- Furthermore, Cogeco Cable recorded an increase of 175,364 RGU,(2) well above the 100,000 projected, due mainly to solid growth in Digital Television customers in both Canada and Europe.
"Our Canadian cable distribution operations are the picture of health and the radio sector continues to do just as well. The recovery plan implemented in the spring by our European subsidiary has started to bear fruit and we won more than 20,000 customers for the different lines in the fourth quarter of 2009, which offsets losses incurred in the previous quarters. We foresee that the stock will reach a more representative value in 2010 primarily thanks to our consolidation strategy in Portugal, an upturn in the economy and the return of confidence in the markets," stated Louis Audet, President and CEO of COGECO.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to COGECO's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "may"; "will'; "should"; "expect"; "plan"; "anticipate"; "believe"; "intend"; "estimate"; "predict"; "potential"; "continue"; "foresee"; "ensure" or other similar expressions concerning matters that are not historical facts. In particular, statements regarding the Company's future operating results and economic performance and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities, which COGECO believes are reasonable as of the current date. While management considers these assumptions to be reasonable based on information currently available to the Company, they may prove to be incorrect. The Company cautions the reader that the current adverse economic conditions make forward-looking information and the underlying assumptions subject to greater uncertainty and that, consequently, they may not materialize, or the results may significantly differ from the Company's expectations. It is impossible for COGECO to predict with certainty the impact that the current economic downturn may have on future results. Forward-looking information is also subject to certain factors, including risks and uncertainties (described in the "Uncertainties and main risk factors" section in the Company's 2009 annual Management's Discussion and Analysis (MD&A) that could cause actual results to differ materially from what COGECO currently expects. These factors include technological changes, changes in market and competition, governmental or regulatory developments, general economic conditions, the development of new products and services, the enhancement of existing products and services, and the introduction of competing products having technological or other advantages, many of which are beyond the Company's control. Therefore, future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forward-looking information and should not rely on this information as of any other date. While management may elect to, the Company is under no obligation (and expressly disclaims any such obligation), and does not undertake to update or alter this information before the next quarter, except as required by Law.
This analysis should be read in conjunction with the Company's consolidated financial statements, prepared in accordance with Canadian generally accepted accounting principles ("GAAP"). Throughout this press release, all amounts are in Canadian dollars unless otherwise indicated.
About COGECO Inc.
COGECO is a diversified communications company. Through its Cogeco Cable subsidiary, COGECO provides its residential customers with Audio, Analogue and Digital Television, as well as HSI and Telephony services using its two-way broadband cable networks. Cogeco Cable also provides, to its commercial customers, data networking, e-business applications, video conferencing, hosting services, Ethernet, private line, VoIP, HSI access, dark fibre, data storage, data security and co-location services and other advanced communication solutions. Through its Cogeco Diffusion subsidiary, COGECO owns and operates the RYTHME FM radio stations in Montreal, Quebec City, Trois-Rivieres and Sherbrooke, as well as the FM 93 radio station in Quebec City. COGECO's subordinate voting shares are listed on the Toronto Stock Exchange (TSX:CGO). The subordinate voting shares of Cogeco Cable are also listed on the Toronto Stock Exchange (TSX:CCA).
(1) The indicated terms do not have standardized definitions prescribed by Canadian Generally Accepted Accounting Principles ("GAAP") and therefore, may not be comparable to similar measures presented by other companies. For more details, please consult the "Non-GAAP financial measures" section of Management's discussion and analysis.
(2) Represents the sum of Basic Cable, High Speed Internet (HSI), Digital Television and Telephony service customers.