Cogeco, the nation's fourth largest cable provider, today announced its financial results for the third quarter of its 2011 fiscal year which ended May 31, 2011.
While revenue and operating income showed strong growth, Cogeco reported a third quarter loss of $56.7 million after it was forced to take a $225.9 million loss on its investment in Cabovisão, a Portuguese cable operator.
The write down was necessary as Cabovisão loses customers and is forced to lower prices during Portugal's current economic crisis.
"Customer losses and service reductions have become more significant and persistent than Cogeco Cable's management expected." said Cogeco President and CEO Louis Audet. "This situation is due to economic measures taken by the Portuguese government to reform the economy and reduce the deficit, which led to a decrease in customer spending capacity. Under these prevailing circumstances Cogeco Cable wrote-off its investment in its Portuguese subsidiary, Cabovisão."
Thanks to strength in Canada, Cogeco reported overall revenue for the quarter increased by 13.3% from the same period a year earlier to $375 million while operating income before amortization rose 15.5% to $147.8 million. Revenue and operating income for the first nine months of the year were up 8.1% and 10.2% to $1.1 billion and $420.8 million respectively.
By May 31, 2011, the consolidated number of Revenue Generating Units or RGUs, in the Portuguese and Canadian cable sector reached 3,369,116, up 41,819 during the three months. RGU's represent the sum of basic service, digital video service, HSI service and digital telephony service customers.
In Canada, Cogeco's revenue-generating units reached 2,526,591, up 176,014 in the first nine months of the year. The following are Cogeco Canadian subscriber counts as of May 31, 28 2011 (numbers in parenthesis' are for August 31, 2010)
- Homes Passed - 1,614,210 (1,593,743)
- Revenue Generating Units - 2,526,591 (2,350,577)
- Basic cable customers - 879,354 (874,505)
- Digital Television customers - 648,862 (559,418)
- High Speed Internet customers - 593,468 (559,057)
- Digital phone lines - 404,907 (357,597)