Press release details

Montréal, November 2, 2016 – Today, Cogeco Inc. (TSX: CGO) (“Cogeco” or the “Corporation”) announced its financial results for the fourth quarter ended August 31, 2016, in accordance with International Financial Reporting Standards (“IFRS”).

For the fourth quarter of fiscal 2016:

• Revenue increased by $18.0 million, or 3.2%, to reach $572.0 million driven by growth in the Communications segment mainly through the improvement of its American broadband services operations, partly offset by lower revenue in the media activities attributable to the sale of Métromédia CMR Plus Inc. ("Métromédia") on January 5, 2016;

• Adjusted EBITDA increased by $13.8 million, or 5.6%, to reach $258.3 million compared to the same period of fiscal 2015 mainly as a result of the improvement in the Communications segment;

• Profit for the period amounted to $80.7 million of which $29.8 million, or $1.78 per share, was attributable to owners of the Corporation compared to profit for the period of $78.5 million for the fourth quarter on fiscal 2015 of which $25.4 million, or $1.52 per share, was attributable to the owners of the Corporation. The increase is mainly due to the improvement of adjusted EBITDA combined with the decreases in integration, restructuring and acquisition costs and in income taxes, partly offset by the increase in claims and litigations as a result of an expense in the current year compared to a gain in the same period of the prior year;

• Free cash flow reached $88.0 million compared to $73.2 million, an increase of $14.9 million, or 20.3%, compared to the same quarter of the prior year resulting from the improvement of adjusted EBITDA combined with the decreases in acquisitions of property, plant and equipment, intangible and other assets, in integration, restructuring and acquisitions costs and in current income taxes, partly offset by the increase in claims and litigations as a result of an expense in the current year compared to a gain in the same period of the prior year;

• Cash flow from operating activities reached $271.1 million compared to $275.7 million, representing a decrease of $4.6 million compared to fiscal 2015 fourth-quarter. The decrease is mostly attributable to the increase in claims and litigations as a result of an expense in the current year compared to a gain in the same period of the prior year, partly offset by the improvement of adjusted EBITDA combined with the decrease in changes in non-cash operating activities primarily due to changes in working capital and in integration, restructuring and acquisition costs;

• A quarterly eligible dividend of $0.295 per share was paid to the holders of subordinate and multiple voting shares, an increase of $0.04 per share, or 15.7%, compared to an eligible dividend of $0.255 per share paid in the fourth quarter of fiscal 2015;

• At its November 2, 2016 meeting, the Board of Directors of Cogeco declared a quarterly eligible dividend of $0.34 per share, an increase of 15.3% compared to the $0.295 dividend per share paid in the fourth quarter of fiscal 2016; and 

• On October 13, 2016, Cogeco Media announced the signing of a new agreement for the broadcasting of the Montreal Canadiens games on Cogeco's French radio network until 2023.

For the fiscal year ended August 31, 2016:

• Revenue increased by $120.2 million, or 5.5%, to reach $2.31 billion driven by growth in the Communications segment mainly through the improvement of its American broadband services operations combined with favorable foreign exchange rates compared to the prior year;

• Adjusted EBITDA increased by $64.2 million, or 6.7%, to reach $1,018.8 million compared to fiscal 2015 as a result of the improvement in the Communications segment combined with favorable foreign exchange rates compared to the prior year and the improvement in the media activities;

• Loss for the year amounted to $158.7 million of which $29.4 million, or $1.75 per share, was attributable to owners of the Corporation compared to profit for the year of $265.2 million for fiscal 2015, of which $89.6 million, or $5.35 per share, was attributable to the owners of the Corporation. The decrease is mainly due to the non-cash pre-tax impairment of goodwill and intangible asset of $450.0 million which occurred in the Communications segment. The remaining variation is explained by the improvement of adjusted EBITDA combined with the decreases in integration, restructuring and acquisition costs, financial expense and income taxes combined with the gain on disposal of Métromédia, partly offset by the increases in depreciation and amortization and in claims and litigations as a result of an expense in the current year compared to a gain in the prior year;

• Free cash flow reached $298.1 million compared to $290.7 million, an increase of $7.3 million, or 2.5%, compared to the prior year resulting from the improvement of adjusted EBITDA and the decrease in financial expense, partly offset by the increases in the acquisitions of property, plant and equipment, in claims and litigations as a result of an expense in the current year compared to a gain in the prior year and in current income taxes;

• Cash flow from operating activities reached $759.0 million compared to $694.3 million, representing an increase of $64.7 million, or 9.3%, compared to fiscal 2015. The increase is mostly attributable to the improvement in adjusted EBITDA combined with an increase in changes in non-cash operating activities primarily due to changes in working capital, partly offset by the increases in income taxes paid and in claims and litigations as a result of an expense in the current year compared to a gain in the prior year; and

• Dividends paid in fiscal 2016 totaled $1.18 per share compared to $1.02 per share in fiscal 2015.

(1)     The indicated terms do not have standardized definitions prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other companies. For more details, please consult the “Non-IFRS financial measures” section of the Management’s discussion and analysis (“MD&A”).