-- Ongoing positive year-over-year revenue and adjusted EBITDA performance
in Canada, along with a re-acceleration of Canadian Internet subscriber
growth
-- New TV streaming solution launched for the U.S.
-- Entering the third year of our transformation program, focused on revenue
generation opportunities and cost efficiencies
-- Introducing fiscal 2027 financial guidelines
-- Increasing quarterly dividend by 2% to $1.007 per share, representing our
23rd consecutive year of dividend growth
MONTRÉAL, Oct. 28, 2026 /CNW/ -- Today, Cogeco Communications Inc. (TSX: CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the fourth quarter ended August 31, 2026 and is issuing its fiscal 2027 financial guidelines.
"Our Canadian business continued to perform in the quarter, with a re-acceleration of our Internet subscriber growth and year-on-year adjusted EBITDA growth for a fourth consecutive quarter", said Frédéric Perron, President and CEO. "We are particularly pleased with our wireless and oxio sales, and see promising growth potential in both areas", continued Mr. Perron.
"In the U.S., we continue to operate in a challenging competitive environment, resulting in elevated customer losses in the quarter. To help offset these headwinds, we are focusing on several initiatives to improve our performance in the U.S., including wireless, our new welo digital brand, a new TV streaming product and new sales channels.
"Building on the good progress made in our transformation program, the third year will focus on revenue generation and cost efficiencies, supported by AI and digital initiatives."
Consolidated financial highlights
Three months ended Change inconstant August 31 2026 2025 Change currency (1) (In thousands of $ $ % % Canadian dollars, except % and per share data) (unaudited) Revenue 695,490 708,693 (1.9) (2.8) Adjusted EBITDA (1) 344,827 358,554 (3.8) (4.7) Adjusted EBITDA margin (1) 49.6 % 50.6 % Profit for the period 87,018 81,690 6.5 Profit for the period attributable to owners of the Corporation 82,871 77,422 7.0 Adjusted profit attributable to owners of the Corporation (1)(2) 86,537 88,590 (2.3) Cash flows from operating activities 354,392 265,143 33.7 Free cash flow (1) 104,245 107,781 (3.3) (3.7) Free cash flow, excluding network expansion projects (1) 131,076 165,599 (20.8) (21.2) Acquisition of property, plant and equipment 161,878 157,625 2.7 Net capital expenditures (1)(3) 161,690 154,274 4.8 3.8 Net capital expenditures, excluding network expansion projects (1) 134,859 96,456 39.8 38.3 Capital intensity (1) 23.2 % 21.8 % Capital intensity, excluding network expansion projects (1) 19.4 % 13.6 % Diluted earnings per share 1.97 1.82 8.2 Adjusted diluted earnings per share (1)(2) 2.05 2.09 (1.9)
Operating results
For the fourth quarter of fiscal 2026 ended on August 31, 2026:
-- Revenue decreased by 1.9% to $695.5 million. On a constant currency
basis(1), revenue decreased by 2.8% due to a decline in the American
telecommunications segment, offset in part by revenue growth in the
Canadian telecommunications segment, as explained below:
-- American telecommunications' revenue decreased by 4.6%, or 6.6% in
constant currency, mainly due to a lower subscriber base compared
to the previous year, and to a higher proportion of customers
subscribing to Internet-only services, as well as a competitive
environment.
-- Canadian telecommunications' revenue increased by 0.6%, mainly
resulting from the cumulative effect of high-speed Internet
service additions over the past year, offset in part by a decline
in video and wireline phone service subscribers, as an increasing
proportion of customers subscribe to Internet-only services, as
well as a competitive environment.
-- Adjusted EBITDA decreased by 3.8% to $344.8 million. On a constant
currency basis, adjusted EBITDA decreased by 4.7%, mainly due to lower
revenue in the American telecommunications segment, offset in part by
cost reduction initiatives and operating efficiencies across the
Corporation as a result of its ongoing three-year transformation
program.
-- American telecommunications' adjusted EBITDA decreased by 7.7%, or
9.6% in constant currency.
-- Canadian telecommunications' adjusted EBITDA increased by 3.3%(4),
or 3.4%(4) in constant currency.
-- Profit for the period amounted to $87.0 million, of which $82.9 million,
or $1.97 per diluted share, was attributable to owners of the Corporation
compared to $81.7 million, $77.4 million, and $1.82 per diluted share,
respectively, in the comparable period of fiscal 2025. The increases in
profit for the period and profit attributable to owners of the
Corporation resulted mainly from lower depreciation and amortization
expense, financial expense, and restructuring costs related to the
Corporation's transformation initiatives, partly offset by higher income
tax expense, lower adjusted EBITDA, and non-cash pre-tax impairment
charges of $5.2 million in connection with asset write-offs following a
change in strategy.
-- Excluding the non-cash impairment charges and certain other
elements, adjusted profit attributable to owners of the
Corporation(2) was $86.5 million, or $2.05 per diluted share(2), a
decrease compared to $88.6 million, or $2.09 per diluted share,
last year.
-- Net capital expenditures were $161.7 million, an increase of 4.8%
compared to $154.3 million in the same period of the prior year. In
constant currency, net capital expenditures(1) were $160.1 million, an
increase of 3.8% compared to last year, mainly due to higher capital
spending related to customer premise equipment, partly offset by the
timing of certain initiatives, both in the Canadian telecommunications
segment, while net capital expenditures in the American
telecommunications segment remained stable.
-- Net capital expenditures in connection with network expansion
projects were $26.8 million, or $26.7 million in constant
currency(1), compared to $57.8 million in the same period of the
prior year. Excluding network expansion projects, net capital
expenditures were $134.9 million, an increase of 39.8% compared to
$96.5 million in the same period of the prior year. In constant
currency, net capital expenditures, excluding network expansion
projects(1) were $133.4 million, an increase of 38.3% compared to
last year.
-- Capital intensity was 23.2% compared to 21.8% last year. Excluding
network expansion projects, capital intensity was 19.4% compared
to 13.6% in the same period of the prior year.
-- Acquisition of property, plant and equipment increased by 2.7% to $161.9
million, mainly resulting from higher capital spending.
-- Free cash flow decreased by 3.3%, or 3.7% in constant currency, and
amounted to $104.2 million, or $103.8 million in constant currency(1),
mainly due to lower adjusted EBITDA, higher net capital expenditures, and
higher current income taxes, partly offset by lower acquisition,
integration, restructuring and other costs, mostly due to lower
restructuring costs related to the Corporation's transformation
initiatives, lower financial expense, and higher proceeds from disposals
of property, plant and equipment. Free cash flow, excluding network
expansion projects, decreased by 20.8%, or 21.2% in constant currency,
and amounted to $131.1 million, or $130.4 million in constant currency.
-- Cash flows from operating activities increased by 33.7% to $354.4 million,
mostly due to higher cash inflows from working capital, primarily due to
the timing of payments made to suppliers and the collection of trade and
other receivables.
-- At its October 28, 2026 meeting, the Board of Directors of Cogeco
Communications declared a quarterly dividend of $1.007 per share, an
increase of 2.0% compared to $0.987 per share last year.
Fiscal 2027 financial guidelines
Cogeco Communications is issuing its fiscal 2027 financial guidelines, as presented below. As we enter the third year of our transformation program, we will focus on revenue generation and cost efficiencies, supported by AI and digital initiatives.
On a constant currency basis, the Corporation expects fiscal 2027 revenue to decrease by a low to mid single digit percentage, reflecting a combination of growth in the Canadian customer base, offset by pricing pressures and subscriber losses in the U.S. due to a highly competitive and promotional market. On a constant currency basis, fiscal 2027 adjusted EBITDA is expected to decrease by a mid to high single digit percentage, due to lower revenue, partly offset by transformation-driven cost efficiencies.
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