Revenues jump 19% at Cogeco
Montreal, - Cogeco Cable Inc. says revenues for the second quarter of fiscal 2001 increased by 19 per cent, from $91.1 million to $108.8 million. For the first six-month period ended February 28, 2001, consolidated revenue amounted to $212.5 million compared to $179.6 million for the same period last year, an increase of 18 per cent.
Cogeco attributes $6.6 million of the growth to the acquisition of cable systems serving approximately 104,000 basic service customers during the first six-month period of fiscal 2001. Internal revenue growth in the second quarter amounted to approximately $11.1 million or 12 per cent. This growth is mainly attributable to continued customer growth for high-speed Internet access and digital services as well as rate increases.
Rate increases for discretionary tiers were implemented on June 1, 2000 in Ontario and on September 1, 2000 in Quebec. Rate increases for basic service were implemented on March 1 and September 1, 2000 in connection with the distribution of certain television services.
Operating income before depreciation and amortization increased by 11 per cent for the second quarter, from $34.5 million to $38.2 million. Operating income margin for the second quarter was 35.1 per cent compared to 37.9 per cent for the same period last year. For the first six months of fiscal 2001, operating income before depreciation and amortization amounted to $74.9 million compared to $69.1 million, an increase of eight per cent.
Operating income margin for the six-month period was 35.2 per cent compared to 38.5 per cent last year. The decrease in operating margins was mainly attributable to higher marketing costs. A provision for severance payments to laid-off employees, as part of cost cutting measures announced last January, has been taken in the second quarter and such provision was offset by a contribution from Excite(at)Home for joint marketing of the high- speed Internet service.
Further to the strategy and systems review undertaken last summer and as part of an overall cost reduction plan with a view to improving the efficiency of its operations without impacting quality of its services, Cogeco Cable announced last January that it would lay off the equivalent of approximately 150 full-time employees. The previously announced cost reduction plan is progressing normally.
Furthermore, the Corporation has announced monthly rate increases ranging from $2 to $3 per customer for discretionary tiers and most service bundles offered in Ontario. Those rate increases will be implemented beginning this month. The impact of all these initiatives should be felt by the third quarter.
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