The Cogeco logo is seen in Montreal on Thursday, October 22, 2020. THE CANADIAN PRESS/Paul Chiasson

Cogeco reports first-quarter profit and revenue up from year ago mark

Cogeco Inc. reported its first-quarter profit rose compared with a year ago as its revenue also climbed, as customers spent more time online during the COVID-19 pandemic.

Cogeco said its Canadian broadband revenue grew 2.2 per cent in the three months ending Nov. 30, amid demand for residential high-speed internet for remote work, school and entertainment, as well as price hikes in June in Ontario and December in Quebec.

U.S. broadband revenue jumped 9.8 per cent, adjusted for exchange rates, with an additional boost from political advertising during the U.S. presidential election.

Radio revenue fell 13 per cent in the quarter compared with the year-ago period, as retailers cut their ad campaigns. The company also said it had a decline in Canadian video service customers, and that it saved money by delaying certain sales and marketing spending.

“While the broadband business had strong results, the media business continued to be impacted by the pandemic due to certain segments of the retail industry reducing advertising budgets revenue,” chief executive Philippe Jette said on a conference call with analysts.

The results come on the heels of the Cogeco board’s decision to reject a takeover offer this fall from Altice USA Inc. and Rogers Communications Inc.

At the Cogeco Inc. annual general meeting, also held on Friday, Louis Audet said the Cogeco’s current share ownership structure gives the company “stability, a long-term perspective, and stewardship.” Audet’s father founded Cogeco, and the family’s holding company, Gestion Audem, has 69 per cent of Cogeco Inc.’s voting rights.

”It’s easy to understand why the Audet family does not wish to sell its interest in the Cogeco companies,” said Audet at the meeting. “I can assure you that the Audet family intends to maintain its long-term commitment to Cogeco.”

In all, the Montreal company’s profit attributable to owners of the corporation totalled $40.5 million or $2.53 per diluted share, up from $31.3 million or $1.94 per diluted share a year earlier.

Revenue was $646.4 million, up from $618.5 million.

Cogeco owns radio broadcaster Cogeco Media as well as a controlling interest in Cogeco Communications Inc., a cable company with operations in Canada and the United States.

Cogeco Communications reported a profit attributable to owners of the corporation of $106.7 million or $2.22 per diluted share, up from $84.2 million or $1.70 per diluted share a year earlier.

Revenue at Cogeco Communications totalled $618.9 million, up from $586.8 million.

Cogeco recently closed its deal to buy DERYtelecom, which it says is the third-largest cable provider in the province of Quebec. Cogeco said it gained about 100,000 customers through the deal.

Jette said Cogeco is also forging ahead on plans to enter the mobile wireless service market, pending a review of mobile services by the Canadian Radio-television and Telecommunications Commission.

Other expansion plans for Cogeco include rural areas of Ontario and Quebec. Jette also said Cogeco’s U.S. brand, Atlantic Broadband, is growing in Florida, and is shuffling its pricing packages to focus on Wi-Fi and broadband amid rising costs for video.

Chief financial officer Patrice Ouimet told analysts on the call that sales and marketing costs will “ramp up” leading up to this year’s back-to-school season, and that “certain cost savings related to the pandemic are expected to decline in the second half of the year.”

But Jette said that “fiscal year 2021 looks very promising, despite the unfavourable economic impacts related to the pandemic.”

Shares of Cogeco Inc. rose 5.4 per cent to $83.13 in Toronto, while Cogeco Communications’ stock was up nearly six per cent to $101.75.

RBC Capital Markets analyst Drew McReynolds said that there is relative value Cogeco Communications’ shares after the rejected Rogers takeover, despite uncertainty over the CRTC’s wireless reviews.

“Cogeco is proving relatively resilient to COVID-19 impacts, reflecting high revenue exposure to what is strong demand for Internet while avoiding the direct COVID-19 impacts on wireless and media revenues (unlike the case for other Canadian operators),” McReynolds wrote in a client note on Friday.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A candlelight vigil will be held in Red Deer on Thursday to honour the 350-plus people killed in the Easter bombing attack in Sri Lanka. Contributed photo
Candlelight vigil planned for deaths linked to Olymel COVID-19 outbreak

A candlelight vigil is being planned for those who died due to… Continue reading

Red Deer Rebels forward Jaxsen Wiebe battles Calgary Hitmen forward Cael Zimmerman for a loose puck when the two teams squared off in February last season. (Photo by BYRON HACKETT/Advocate Staff)
Calgary Hitmen shutout Red Deer Rebels

Rebels name centre Jayden Grubbe team captain ahead of Friday’s game

Traffic will be delayed on 40th Avenue and 19th Street until the end of February. (Advocate file photo).
Traffic delays expected downtown this weekend

Red Deer drivers will be delayed in the downtown area of the… Continue reading

COVID
Red Deer down to 313 active cases of COVID-19

Alberta reports an additional 411 COVID-19 cases

Bryson, six, and Mara, eight, play with puppies from Dogs With Wings Saturday. (Photo by Sean McIntosh/Advocate staff)
WATCH: Dogs With Wings introduces Red Deer program

A program that trains puppies to be certified service, autism, facility and… Continue reading

Harley Hay
Harley Hay: Just don’t call it cod liver oil

Many people swear that a daily dose of various vitamins is an… Continue reading

Email editor@auburn-reporter.com
Letter: Preserving green spaces in Red Deer

The Advocate published an article Feb. 11 about Sunnybrook residents concerned about… Continue reading

Former Toronto Argonauts lineman Chris Schultz remembered as a gentle giant

Former Toronto Argonauts lineman Chris Schultz remembered as a gentle giant

Los Angeles Kings head coach Darryl Sutter, top, is shown on the bench after NHL action against the Clagary Flames  in Calgary, Alta., Thursday April 9, 2015. Sutter says he has "unfinished business" as he returns to coach the Calgary Flames. THE CANADIAN PRESS/Larry MacDougal
Darryl Sutter has ‘unfinished business’ in return to Calgary Flames

Darryl Sutter has ‘unfinished business’ in return to Calgary Flames

Walter Gretzky talks to people while at the funeral of Celtic music legend John Allan Cameron at St. Isaac Jogues Church in Pickering, Ont., Monday, Nov. 27, 2006. THE CANADIAN PRESS/Nathan Denette
‘A legend in his own right’: Hockey world pays tribute to the late Walter Gretzky

‘A legend in his own right’: Hockey world pays tribute to the late Walter Gretzky

Jordan Spieth follows his approach shot to the ninth green during the second round of the Arnold Palmer Invitational golf tournament Friday, March 5, 2021, in Orlando, Fla. (AP Photo/John Raoux)
Conners builds 1-shot lead at Bay Hill as McIlroy lurks

Conners builds 1-shot lead at Bay Hill as McIlroy lurks

Team Canada skip Brad Gushue makes a shot as he plays Team Ontario at the Brier in Calgary, Alta., Friday, March 5, 2021.THE CANADIAN PRESS/Jeff McIntosh
Brier in the Bubble: Defending champion Gushue beats Epping in opening draw

Brier in the Bubble: Defending champion Gushue beats Epping in opening draw

Switzerland's celebrates after the final match at the Women's Curling World Championship in Silkeborg Denmark Sunday March 24. 2019. The 2021 world women's curling championship is back on the curling calendar. THE CANADIAN PRESS/AP, Ritzau Scanpix - Henning Bagger
Women’s world curling championship back on calendar, added to Calgary bubble

Women’s world curling championship back on calendar, added to Calgary bubble

Most Read