Cogeco’s profit edges lower amid revenue rise
Company offered friendly deal to buy Quebec-based DERYtelecom for $405M
Cogeco Inc. says its Quebec-focused media business continued to experience low ad revenue through the summer months, but its cable and internet operations fared well in both Canada and the United States.
The Montreal-based company reported a net profit of $30.7 million or $1.92 per diluted share for the quarter ended Aug. 31, down from $31.4 million or $1.93 per diluted share a year ago.
Cogeco Inc.’s revenue in the quarter totalled $624.2 million, up from $610.5 million. Most of the revenue is generated by Cogeco Communications Inc., which operates as Cogeco Connexions in Canada and Atlantic Broadband in the United States.
“We are satisfied with the results at Cogeco Media given the impact that the pandemic had on the advertising market,” chief executive Philippe Jette said in a statement.
“Our continued financial discipline contributed to improving profitability compared to last quarter and we are observing a slight upturn in the forward advertising bookings.” Cogeco Communications earned $90.8 million or $1.88 per diluted share on $605.2 million in revenue for the quarter ended Aug. 31. The result was up from a profit of $89.8 million or $1.80 per diluted share on $583.7 million in revenue in the same period a year earlier.
The companies also increased their dividends by about 10 per cent, as they’ve done in previous years, and provided an outlook for fiscal 2021, which began Sept. 1.
Analysts had estimated Cogeco Communications would have $1.79 per share of adjusted earnings and $602 million of revenue in the quarter, according to financial data firm Refinitiv.
Analyst Aravinda Galappatthige of Canaccord Genuity wrote in a note to clients Wednesday that Cogeco Communications received some extra upward push on revenue from a U.S. acquisition and currency exchange rates.
Cogeco Communications underlined its intention to remain an independent force by announcing a friendly deal to buy DERYtelecom, a fellow Quebec cable and internet company for $405 million.