MONTREAL, Dec. 12 /CNW Telbec/ - For fiscal 2006, COGECO Inc. (TSX: CGO) announced improvement in most of its performance indicators. Whereas the cable sector greatly contributed to this improvement with strong internal and external growth, results in the media sector were characterized by growth in radio and stabilization in television.
COGECO's revenue totalled $746.9 million, an increase of 10.6% compared to the prior fiscal year mainly as a result of the cable sector's revenue growth of $65.6 million. In addition, operating income before amortization increased by 8.2% to reach $253.1 million thanks to a $25.5 million contribution from the cable sector, offset by a $7.4 million decrease in the media sector. Excluding the net effect of the income tax recovery after non-controlling interest, net income would have stood at $15.2 million. However, net income stood at $23.1 million when this element was included.
"COGECO's results, especially those of its cable subsidiary, improved. An exceptional increase of 62.1% in the number of revenue-generating units (RGU) was reported, with more than 208,000 coming from Canada, mainly as a result of the positive impact of the deployment of our Digital Telephony service that encouraged our customers to subscribe to more than one service. Furthermore, the acquisition of Cabovisao - Televisao por Cabo, S.A., the second largest cable telecommunications company in Portugal, contributed to this growth with the addition of 629,000 RGUs. As for our media subsidiary, the RYTHME FM network is making its mark in its regional markets while maintaining its leadership position in Montreal's Francophone market. In addition, TQS experienced a year of transition and stabilization, thanks to changes made within the management team and to new and very successful shows", said Mr. Louis Audet, President and CEO of COGECO, at the Company's annual shareholders' meeting.
Cable sector
For fiscal year 2006, consolidated revenue increased by $65.6 million to reach $620 million, consolidated operating income before amortization rose by $25.5 million, net income amounted to $65.6 million, and to $45.6 million, when excluding the impact of the income tax recovery.
During fiscal 2006, Canadian operations in the cable sector reported continuous growth in all services as a result of the positive impact of our Digital Telephony service. "More than 56% of the clients who subscribed to our Digital Telephony service in 2006 subscribed to all Cogeco Cable services. Several enhancements to our offering throughout the year explain such enthusiasm for Cogeco services," added Mr. Audet.
Media sector
For fiscal 2006, the RYTHME FM network asserted its position throughout the province of Quebec. Furthermore, according to BBM surveys conducted during fiscal 2006, radio-station 105.7 RYTHME FM in Montreal continued to get good results with several of its shows making it on the list of most popular programs. The other radio stations reinforced their position in their respective markets.
"With respect to TQS, shows such as 'Donnez au suivant', the arrival of new information and public affairs programs and the second edition of 'Loft Story' brought in large audiences. In addition, significant changes made to the management team were beneficial to TQS network operations. And as usual special attention was given to cost control, in line with our initial plan," declared Mr. Audet.
2007: a promising year
Consolidated outlook
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For fiscal 2007, COGECO expects to generate revenue exceeding $1 billion and an increase in operating income before amortization of between 33% and 35%. Free cash flow should reach $15 million to $20 million and net income should stand at about $15 million, as a result of operating income before amortization growth.
Cable sector
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"For fiscal 2007, all Cogeco Cable employees in Canada and abroad will aim to increase customer satisfaction through improved customer service and enhanced product and service offerings. We will maintain tight controls over the cable subsidiary's costs and we will work to continue to improve our business processes. With respect to our new Portuguese subsidiary, the Cabovisao integration plan is well under way and we believe Cabovisao will contribute to the creation of value for COGECO's shareholders as early as this fiscal year," concluded Mr. Audet.
Media sector
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In September 2007, TQS celebrated its 20th anniversary and unveiled a new image as well as strong programming which includes standard favourites and promising new shows. New shows, new hosts and standard favourites will drive TQS's performance. Since it began, Loft Story III enjoyed large audiences. Loft Story III and other original shows will help sustain TQS's viewership. As for radio, management will focus on maintaining leadership in the key Montreal market while continuing to improve performance in all regional markets.
ABOUT COGECO
COGECO is a diversified communications company. Through its Cogeco Cable subsidiary, COGECO provides about 1,556,000 revenue-generating units (RGU) to approximately 1,477,000 homes passed in its Canadian service territory and 629,000 RGUs to approximately 826,000 homes passed in its Portuguese service territory. Through its two-way broadband cable networks, Cogeco Cable provides its residential and commercial customers with analog and digital video and audio services, High Speed Internet access as well as Telephony services. Through its Cogeco Radio-Television subsidiary, COGECO holds a 60% interest and operates the TQS network, six TQS television stations, and three French CBC-affiliated television stations in partnership with CTV Television. Cogeco Radio-Television also wholly owns and operates the RYTHME FM radio stations in Montreal, Quebec City, Trois-Rivieres and Sherbrooke as well as the 93.3 station in Quebec City. COGECO's subordinate voting shares are listed on the Toronto Stock Exchange (CGO). The subordinate voting shares of Cogeco Cable are also listed on the Toronto Stock Exchange (CCA).