MONTREAL (CP) - Cogeco Inc. (
TSX: T.CGO), citing acquisition and other costs, is reporting a slightly reduced profit in the second quarter despite a big boost in revenues.
The Quebec-based cable company and radio broadcaster says it earned $18.9 million or $1.12 per diluted share in the three months ended May 31.
That was down 2.6 per cent from the $19.3 million or $1.15 per share it earned in the year-earlier period. However, revenue rose almost 41 per cent to $504.4 million from $358 million.
Cogeco said the drop in net profit was mostly due to acquisition costs, as well as additional depreciation and amortization and financing expenses that included some $3.5 million to refinance long-term debt with respect to the recent acquisitions.
That was partly offset by operating income before depreciation and amortization generated by Canadian operations and by the recent acquisitions in the cable segment.
"We are satisfied with the favourable results obtained for the third quarter of fiscal 2013," president and CEO Louis Audet said in the company's earnings release.
"The cable subsidiary continues along a path of steady growth and profitability, as per expectations," Audet said, noting that in the last three months the company had "successfully refinanced over half of Cogeco Cable's indebtedness in order to take advantage of historically low interest rates."
"Regarding our media business, Cogeco Diffusion Inc.'s radio business ratings continue to lead in many of its markets and we are pleased to see continued appetite for radio and transit advertising from our customers. Our media business is delivering results according to plan."
The company's main operating subsidiary, Cogeco Cable (TSX:CCA), reported its third-quarter revenue increased 45.3 per cent to $464.5 million from $319.8 million in the same 2012 period.
Profit declined fractionally to $53.05 million, or $1.08 per diluted share, from $53.12 million or $1.09 per share in the prior-year period.
Cogeco, through Cogeco Cable subsidiary, provides residential and business customers TV, Internet and telephone services under the Cogeco brand name in Quebec and Ontario, and in several U.S. states through its subsidiary Atlantic Broadband.
Through its subsidiaries Cogeco Data Services and PEER 1 Hosting, Cogeco Cable provides also provides commercial customers, a suite of IT hosting, information and communications technology services, with 23 data centres, extensive fibre networks in Montreal and Toronto as well as elsewhere in North America and Europe and through Cogeco Diffusion owns and operates 13 radio stations across Quebec.