Technology

Cogeco Releases its Financial Results for the Fourth Quarter of Fiscal 2024

Published

2 years ago

October 31, 2024

Strong progress on the strategic priorities announced last quarter centered on synergies, digitization, advanced analytics, network expansion and wireless, as well as transforming our radio business.Successfully completed the combination of our Canadian and U.S. telecommunications teams.Signed strategic partnerships to enable an upcoming launch of wireless services in Canada, in a capital-efficient manner as an MVNO.Met or exceeded all financial guidelines set for fiscal 2024; issuing fiscal 2025 financial guidelines.Increasing quarterly eligible dividend by 8.0% to $0.922 per share.

MONTRÉAL, Oct. 31, 2024 /CNW/ – Today, Cogeco Inc. (TSX: CGO) (“Cogeco” or the “Corporation”) announced its financial results for the fourth quarter ended August 31, 2024 and is issuing its fiscal 2025 financial guidelines.

“Fiscal 2024 has been a year of tremendous progress for Cogeco,” said Frédéric Perron, President and CEO. “Over the last six months alone, we set clear priorities to achieve sustainable growth, launched wireless in the U.S., assembled the building blocks to launch wireless in Canada as an MVNO, successfully combined our Canadian and U.S. organizations and refreshed our executive team. The recently completed restructuring, which simplified our operating model, was the first phase of a structured three-year program. We are now in a position to accelerate our digital capabilities, drive bundling across wireline and wireless, and continue to optimize our operations for ongoing growth and value creation.

“Our Canadian telecommunications business continued to perform well in Q4, driven by growth of our Internet subscriber base through Cogeco Connexion, oxio, and our network expansion program. We’re particularly excited about our oxio brand’s performance as its digital model has not only become a growth engine for the organization, but has also become a model for key transformation initiatives within the Corporation more broadly.

“In the U.S., the launch of Breezeline Mobile provides customers even more compelling reasons to bundle their services with us. Our Internet-led strategy and focus on operational efficiency contributed to another quarter of strong margin growth.

“While competitive dynamics in the radio advertising market remain challenging, many of Cogeco Media’s radio stations remained high in the ratings again this quarter. Furthermore, our digital advertising solutions continue to provide a growing contribution to our overall revenue.

“Over the past year, we have maintained our balanced approach to allocating capital to growth initiatives including network expansion, product improvements, and a capital-light approach to growing wireless services in both countries, as well as returning capital through an increased dividend and share buybacks, all while progressively reducing our leverage. We will continue with our balanced approach in fiscal 2025 and with that, we are delighted to announce an increase in our quarterly dividend per share to $0.922.”

Consolidated Financial Highlights

Three months ended August 31

2024

2023

(1)

Change

Change in

constant
currency

(2)

(In thousands of Canadian dollars, except % and per share data) (unaudited)

Revenue

768,656

766,652

0.3

(1.0)

Adjusted EBITDA (2)

371,216

351,925

5.5

4.2

Profit for the period

81,437

90,521

(10.0)

Profit for the period attributable to owners of the Corporation

19,248

29,234

(34.2)

Adjusted profit attributable to owners of the Corporation (2)(3)

25,562

33,006

(22.6)

Cash flows from operating activities

326,723

284,370

14.9

Free cash flow (1)(2)

143,055

87,274

63.9

63.4

Free cash flow, excluding network expansion projects (1)(2)

199,966

120,202

66.4

65.5

Acquisition of property, plant and equipment

156,577

207,434

(24.5)

Net capital expenditures (2)(4)

154,570

178,481

(13.4)

(14.7)

Net capital expenditures, excluding network expansion projects (2)

97,659

145,553

(32.9)

(34.1)

Diluted earnings per share

1.99

1.87

6.4

Adjusted diluted earnings per share (2)(3)

2.65

2.12

25.0

Operating results

For the fourth quarter of fiscal 2024 ended on August 31, 2024:

Revenue remained stable at $768.7 million. On a constant currency basis(2), revenue decreased by 1.0% due to a decline in revenue in the American telecommunications segment and in the media activities, offset in part by revenue growth in the Canadian telecommunications segment, as explained below.American telecommunications’ revenue decreased by 2.3% in constant currency (remained stable as reported), mainly due to a decline in its subscriber base, especially for entry-level services, and a higher proportion of customers subscribing to Internet-only services. The decline was offset in part by higher revenue per subscriber and a better product mix resulting from improving subscriber metrics.Revenue in the media activities decreased by 10.1% as competitive dynamics in the radio advertising market remain challenging.Canadian telecommunications’ revenue increased by 0.8%, mostly driven by the cumulative effect of high-speed Internet service additions over the past year, including from network expansion projects, as well as the Niagara Regional Broadband Network acquisition completed on February 5, 2024.Adjusted EBITDA increased by 5.5% to $371.2 million. On a constant currency basis, adjusted EBITDA increased by 4.2%, mainly due to higher adjusted EBITDA in both the Canadian and American telecommunications segments, driven by cost reduction initiatives and operating efficiencies across the Corporation as a result of our ongoing transformation program, in addition to revenue growth in the Canadian telecommunications segment.Canadian telecommunications adjusted EBITDA increased by 3.8%, or 4.0% in constant currency.American telecommunications adjusted EBITDA increased by 5.2%, or 2.4% in constant currency.Profit for the period amounted to $81.4 million, of which $19.2 million, or $1.99 per diluted share, was attributable to owners of the Corporation compared to $90.5 million, $29.2 million, and $1.87 per diluted share, respectively, in the comparable period of fiscal 2023. The decreases in profit for the period and profit attributable to owners of the Corporation resulted mainly from higher depreciation and amortization expense and non-cash pre-tax impairment charges of $15.2 million recognized during the quarter mostly in relation to strategic partnerships to facilitate the development of wireless services in Canada under a capital-light operating model, partly offset by higher adjusted EBITDA and lower financial expense.Adjusted profit attributable to owners of the Corporation(3) was $25.6 million, or $2.65 per diluted share(3), compared to $33.0 million, or $2.12 per diluted share, last year. The increase of adjusted diluted earnings per share over last year reflects the benefit of the Corporation’s share buybacks.Net capital expenditures were $154.6 million, a decrease of 13.4% compared to $178.5 million in the same period of the prior year. In constant currency, net capital expenditures(2) were $152.3 million, a decrease of 14.7% compared to last year, mainly resulting from lower spending due to the timing of network expansion projects in both the American and Canadian telecommunications segments, in addition to drawdowns of previously accumulated customer premise equipment inventory in the American telecommunications segment.Excluding network expansion projects, net capital expenditures were $97.7 million, a decrease of 32.9% compared to $145.6 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects(2) were $96.0 million, a decrease of 34.1% compared to last year.Fibre-to-the-home network expansion projects continued in both Canada and the United States by adding close to 58,000(5) homes passed during fiscal 2024, of which close to 14,000(5) were in the fourth quarter.Acquisition of property, plant and equipment decreased by 24.5% to $156.6 million, mainly resulting from lower spending.Free cash flow(1) increased by 63.9%, or 63.4% in constant currency, and amounted to $143.1 million, or $142.6 million in constant currency, mainly due to lower net capital expenditures, higher adjusted EBITDA and lower financial expense. Free cash flow, excluding network expansion projects(1) increased by 66.4%, or 65.5% in constant currency, and amounted to $200.0 million, or $198.9 million in constant currency.Cash flows from operating activities increased by 14.9% to $326.7 million, mainly from the timing of payments of trade and other payables and higher adjusted EBITDA.At its October 31, 2024 meeting, the Board of Directors of Cogeco declared a quarterly eligible dividend of $0.922 per share, an increase of 8.0% compared to $0.854 per share last year.

FISCAL 2025 FINANCIAL GUIDELINES

Cogeco released its fiscal 2025 financial guidelines. Fiscal 2025 will be the first year of a three-year transformation program, where investments are made in order to set the Corporation on a path to sustainable growth. On a constant currency basis, the Corporation expects fiscal 2025 revenue to remain stable resulting from a combination of Internet subscriber growth and a decline in video and wireline phone subscriptions. On a constant currency basis, fiscal 2025 adjusted EBITDA is anticipated to remain stable, mainly due to stable revenue as well as stable operating expenses, which are anticipated to benefit from the recent corporate reorganization and other operational improvements, offset by investments into new capabilities as part of a three-year transformation program. Net capital expenditures are anticipated to be between $660 and $735 million, including net investments of approximately $140 to $190 million in growth-oriented network expansions, which will increase the Corporation’s footprint in Canada and the United States. Free cash flow and free cash flow, excluding network expansion projects, are expected to decrease between 0% and 10% due to stronger than anticipated free cash flow in fiscal 2024, continued growth-oriented investments, and higher financial expense and current income tax.

October 31, 2024

Projections

(i)

Actual

Fiscal 2025

(constant currency)

(ii)

Fiscal 2024

(In millions of Canadian dollars, except percentages)

Financial guidelines

Revenue

Stable

3,074

Adjusted EBITDA

Stable

1,455

Net capital expenditures

$660 to $735

643

Net capital expenditures in connection with network expansion projects

$140 to $190

137

Free cash flow

Decrease of 0% to 10%

(iii)

476

Free cash flow, excluding network expansion projects

Decrease of 0% to 10%

(iii)

613

(i)

Percentage of changes compared to fiscal 2024.

(ii)

Fiscal 2025 financial guidelines are based on a USD/CDN constant exchange rate of 1.3606 USD/CDN.

(iii)

The assumed current income tax effective rate is approximately 14%.

These financial guidelines, including the various assumptions underlying them, contain forward-looking statements concerning the business outlook for Cogeco, and should be read in conjunction with the “Forward-looking statements” section of this press release.

(1)

During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation. For further details, please refer to the “Non-IFRS Accounting Standards and other financial measures” section of this press release.

(2)

Adjusted EBITDA and net capital expenditures are total of segments measures. Constant currency basis, adjusted profit attributable to owners of the Corporation, net capital expenditures, excluding network expansion projects, free cash flow and free cash flow, excluding network expansion projects are non-IFRS Accounting Standards measures. Change in constant currency and adjusted diluted earnings per share are non-IFRS Accounting Standards ratios. These indicated terms do not have standardized definitions prescribed by IFRS® Accounting Standards, as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) and therefore, may not be comparable to similar measures presented by other companies. For more information on these financial measures, please consult the “Non-IFRS Accounting Standards and other financial measures” section of this press release.

(3)

Excludes the impact of non-cash impairment charges, and acquisition, integration, restructuring and other costs, net of tax and non-controlling interest.

(4)

Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance.

(5)

Organic growth calculated by excluding additions resulting from acquisitions.

Financial highlights

Three months and years ended August 31

2024

2023

(1)

Change

Change in

constant
currency

(2)

(3)

2024

2023

(1)

Change

Change in

constant
currency

(2)

(3)

(In thousands of Canadian dollars, except % and per share data)

Operations

Revenue

768,656

766,652

0.3

(1.0)

3,073,985

3,081,136

(0.2)

(0.7)

Adjusted EBITDA (3)

371,216

351,925

5.5

4.2

1,454,817

1,432,929

1.5

1.0

Acquisition, integration, restructuring and other costs (4)

12,177

15,239

(20.1)

63,298

36,245

74.6

Impairment of property, plant and equipment, intangible assets and goodwill

15,229

—

15,229

88,000

(82.7)

Profit for the period

81,437

90,521

(10.0)

349,381

350,235

(0.2)

Profit for the period attributable to owners of the Corporation

19,248

29,234

(34.2)

96,746

70,630

37.0

Adjusted profit attributable to owners of the Corporation (3)(5)

25,562

33,006

(22.6)

119,048

149,298

(20.3)

Cash flow

Cash flows from operating activities

326,723

284,370

14.9

1,185,150

968,214

22.4

Free cash flow (1)(3)

143,055

87,274

63.9

63.4

475,765

424,083

12.2

12.0

Free cash flow, excluding network expansion projects (1)(3)

199,966

120,202

66.4

65.5

613,159

596,918

2.7

2.4

Acquisition of property, plant and equipment

156,577

207,434

(24.5)

664,004

806,237

(17.6)

Net capital expenditures (3)(6)

154,570

178,481

(13.4)

(14.7)

642,747

702,913

(8.6)

(9.0)

Net capital expenditures, excluding network expansion projects (3)

97,659

145,553

(32.9)

(34.1)

505,353

530,078

(4.7)

(5.1)

Per share data (7)

Earnings per share

Basic

2.02

1.89

6.9

8.63

4.53

90.5

Diluted

1.99

1.87

6.4

8.55

4.51

89.6

Adjusted diluted (3)(5)

2.65

2.12

25.0

10.52

9.53

10.4

Dividends per share

0.854

0.731

16.8

3.416

2.924

16.8

(1)

During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Proceeds on disposals of property, plant and equipment amounted to $0.6 million and $3.4 million for the three-month period and year ended August 31, 2024, respectively ($1.0 million and $2.7 million, respectively, in fiscal 2023). Comparative figures were restated to conform to the current presentation. For further details, please refer to the “Non-IFRS Accounting Standards and other financial measures” section of this press release.

(2)

Key performance indicators presented on a constant currency basis are obtained by translating financial results from the current periods denominated in US dollars at the foreign exchange rate of the comparable periods of the prior year. For the three-month period and year ended August 31, 2023, the average foreign exchange rates used for translation were 1.3329 USD/CDN and 1.3467 USD/CDN, respectively.

(3)

Adjusted EBITDA and net capital expenditures are total of segments measures. Adjusted profit attributable to owners of the Corporation, free cash flow, free cash flow, excluding network expansion projects and net capital expenditures, excluding network expansion projects are non-IFRS Accounting Standards measures. Change in constant currency and adjusted diluted earnings per share are non-IFRS Accounting Standards ratios. These indicated terms do not have standardized definitions prescribed by IFRS Accounting Standards and therefore, may not be comparable to similar measures presented by other companies. For more information on these financial measures, please consult the “Non-IFRS Accounting Standards and other financial measures” section of this press release.

(4)

For the three-month period and year ended August 31, 2024, acquisition, integration, restructuring and other costs were mostly related to restructuring costs recognized during the second half of the year, including costs related to the new organizational structure announced in May 2024 and other cost optimization initiatives. For the three-month period and year ended August 31, 2023, acquisition, integration, restructuring and other costs resulted mostly from costs related to the integration of past acquisitions, as well as acquisition and integration costs incurred in connection with the acquisition of oxio, completed on March 3, 2023, from restructuring costs associated with organizational changes during the fourth quarter of fiscal 2023 within the Canadian and the American telecommunications segments and from configuration and customization costs related to cloud computing arrangements. Furthermore, a retroactive adjustment of $8.4 million was recognized in fiscal 2023 following the Copyright Board preliminary conclusions on the redetermination of the 2014-2018 royalty rates, of which $4.2 million was reversed during the second quarter of fiscal 2024 following the Copyright Board decision issued in January 2024.

(5)

Excludes the impact of non-cash impairment charges, acquisition, integration, restructuring and other costs, and gains/losses on debt modification and/or extinguishment, all net of tax and non-controlling interest.

(6)

(7)

Per multiple and subordinate voting share.

As at

August 31, 2024

August 31, 2023

(In thousands of Canadian dollars, except %)

Financial condition

Cash and cash equivalents

77,746

363,854

Total assets

9,773,739

9,869,778

Long-term debt

Current

370,108

43,325

Non-current

4,594,057

5,045,672

Net indebtedness (1)

4,957,594

4,817,113

Equity attributable to owners of the Corporation

810,437

925,863

Return on equity (2)

11.1 %

7.7 %

(1)

Net indebtedness is a capital management measure. For more information on this financial measure, please consult the “Non-IFRS Accounting Standards and other financial measures” section of the Corporation’s MD&A for the year ended August 31, 2024, available on SEDAR+ at www.sedarplus.ca.

(2)

Return on equity is a supplementary financial measure and is calculated as profit attributable to owners of the Corporation for the year divided by the average of the equity attributable to owners of the Corporation for the year.

Forward-looking statements

Certain statements contained in this press release may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Cogeco Inc.’s (“Cogeco” or the “Corporation”) future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as “may”; “will”; “should”; “expect”; “plan”; “anticipate”; “believe”; “intend”; “estimate”; “predict”; “potential”; “continue”; “foresee”, “ensure” or other similar expressions concerning matters that are not historical facts. Particularly, statements relating to the Corporation’s financial guidelines, future operating results and economic performance, objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, purchase price allocation, tax rates, weighted average cost of capital, performance and business prospects and opportunities, which Cogeco believes are reasonable as of the current date. Refer in particular to the “Corporate objectives and strategy” and “Fiscal 2025 financial guidelines” sections of the Corporation’s Fiscal 2024 annual Management’s Discussion and Analysis (“MD&A”) for a discussion of certain key economic, market and operational assumptions we have made in preparing forward-looking statements. While management considers these assumptions to be reasonable based on information currently available to the Corporation, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what Cogeco currently expects. These factors include risks such as general market conditions, competitive risks (including changing competitive and technology ecosystems and disruptive competitive strategies adopted by our competitors), business risks, regulatory risks, tax risks, technology risks (including cybersecurity), financial risks (including variations in currency and interest rates), economic conditions (including inflation pressuring revenue, reduced consumer spending and increasing costs), talent management risks (including the highly competitive market for a limited pool of digitally skilled employees), human-caused and natural threats to the Corporation’s network (including increased frequency of extreme weather events with the potential to disrupt operations), infrastructure and systems, sustainability and sustainability reporting risks, ethical behavior risks, ownership risks, litigation risks and public health and safety, many of which are beyond the Corporation’s control. Moreover, the Corporation’s radio operations are significantly exposed to advertising budgets from the retail industry, which can fluctuate due to increased competition and changing economic conditions. For more exhaustive information on these risks and uncertainties, the reader should refer to the “Uncertainties and main risk factors” section of the Corporation’s Fiscal 2024 annual MD&A. These factors are not intended to represent a complete list of the factors that could affect Cogeco and future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forward-looking information contained in this press release and the forward-looking statements contained in this press release represent Cogeco’s expectations as of the date of this press release (or as of the date they are otherwise stated to be made) and are subject to change after such date. While management may elect to do so, the Corporation is under no obligation (and expressly disclaims any such obligation) and does not undertake to update or alter this information at any particular time, whether as a result of new information, future events or otherwise, except as required by law.

All amounts are stated in Canadian dollars unless otherwise indicated. This press release should be read in conjunction with the MD&A included in the Corporation’s Fiscal 2024 Annual Report, the Corporation’s consolidated financial statements and the notes thereto prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) for the year ended August 31, 2024.

Non-IFRS Accounting Standards and other financial measures

This press release includes references to non-IFRS Accounting Standards and other financial measures used by Cogeco. These financial measures are reviewed in assessing the performance of Cogeco and used in the decision-making process with regard to its business units.

Reconciliations between non-IFRS Accounting Standards and other financial measures to the most directly comparable IFRS Accounting Standards measures are provided below. Certain additional disclosures for non-IFRS Accounting Standards and other financial measures used in this press release have been incorporated by reference and can be found in the “Non-IFRS Accounting Standards and other financial measures” section of the Corporation’s MD&A for the year ended August 31, 2024, available on SEDAR+ at www.sedarplus.ca. The following non-IFRS Accounting Standards measures are used as a component of Cogeco’s non-IFRS Accounting Standards ratios.

Specified non-IFRS Accounting Standards measure

Used in the component of the following non-IFRS Accounting Standards ratio

Adjusted profit attributable to owners of the Corporation

Adjusted diluted earnings per share

Financial measures presented on a constant currency basis for the three-month period and year ended August 31, 2024 are translated at the average foreign exchange rate of the comparable periods of the prior year, which were 1.3329 USD/CDN and 1.3467 USD/CDN, respectively.

Constant currency basis and foreign exchange impact reconciliation

Consolidated

Three months ended August 31

2024

2023

(1)

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

constant
currency

Revenue

768,656

(9,731)

758,925

766,652

0.3

(1.0)

Operating expenses

397,440

(5,234)

392,206

414,727

(4.2)

(5.4)

Adjusted EBITDA

371,216

(4,497)

366,719

351,925

5.5

4.2

Free cash flow (1)

143,055

(462)

142,593

87,274

63.9

63.4

Net capital expenditures

154,570

(2,254)

152,316

178,481

(13.4)

(14.7)

(1)

During the fourth quarter of fiscal 2024, the Corporation updated its free cash flow calculation to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.

Years ended August 31

2024

2023

(1)

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

constant
currency

Revenue

3,073,985

(15,024)

3,058,961

3,081,136

(0.2)

(0.7)

Operating expenses

1,619,168

(8,121)

1,611,047

1,648,207

(1.8)

(2.3)

Adjusted EBITDA

1,454,817

(6,903)

1,447,914

1,432,929

1.5

1.0

Free cash flow (1)

475,765

(932)

474,833

424,083

12.2

12.0

Net capital expenditures

642,747

(3,340)

639,407

702,913

(8.6)

(9.0)

(1)

Canadian telecommunications segment

Three months ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

constant
currency

Revenue

378,702

—

378,702

375,754

0.8

Operating expenses

175,688

(288)

175,400

180,183

(2.5)

(2.7)

Adjusted EBITDA

203,014

288

203,302

195,571

3.8

4.0

Net capital expenditures

71,000

(245)

70,755

73,348

(3.2)

(3.5)

Years ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

constant
currency

Revenue

1,510,506

—

1,510,506

1,489,915

1.4

Operating expenses

710,706

(447)

710,259

701,717

1.3

1.2

Adjusted EBITDA

799,800

447

800,247

788,198

1.5

Net capital expenditures

356,274

(463)

355,811

354,384

0.5

0.4

American telecommunications segment

Three months ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

constant
currency

Revenue

369,049

(9,731)

359,318

367,643

0.4

(2.3)

Operating expenses

185,588

(4,916)

180,672

193,172

(3.9)

(6.5)

Adjusted EBITDA

183,461

(4,815)

178,646

174,471

5.2

2.4

Net capital expenditures

76,238

(2,011)

74,227

100,488

(24.1)

(26.1)

Years ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

constant
currency

Revenue

1,466,018

(15,024)

1,450,994

1,494,213

(1.9)

(2.9)

Operating expenses

759,658

(7,632)

752,026

800,409

(5.1)

(6.0)

Adjusted EBITDA

706,360

(7,392)

698,968

693,804

1.8

0.7

Net capital expenditures

267,728

(2,865)

264,863

336,910

(20.5)

(21.4)

Adjusted profit attributable to owners of the Corporation

Three months ended August 31

Years ended August 31

2024

2023

2024

2023

(In thousands of Canadian dollars)

Profit for the period attributable to owners of the Corporation

19,248

29,234

96,746

70,630

Impairment of property, plant and equipment, intangible assets and goodwill

15,229

—

15,229

88,000

Acquisition, integration, restructuring and other costs

12,177

15,239

63,298

36,245

Loss on debt extinguishment (1)

—

16,880

—

Tax impact for the above items

(7,173)

(3,832)

(25,151)

(27,770)

Non-controlling interest impact for the above items

(13,919)

(7,635)

(47,954)

(17,807)

Adjusted profit attributable to owners of the Corporation

25,562

33,006

119,048

149,298

(1)

Included within financial expense.

Free cash flow and free cash flow, excluding network expansion projects reconciliations

Three months ended August 31

Years ended August 31

2024

2023

(1)

2024

2023

(1)

(In thousands of Canadian dollars)

Cash flows from operating activities

326,723

284,370

1,185,150

968,214

Changes in other non-cash operating activities

(44,264)

(12,970)

(58,459)

102,422

Income taxes paid

6,124

2,190

4,890

91,968

Current income taxes

(682)

(5,523)

(20,995)

(31,973)

Interest paid

74,150

66,544

275,283

243,321

Financial expense

(64,461)

(71,198)

(286,672)

(255,010)

Loss on debt extinguishment (2)

—

16,880

—

Amortization of deferred transaction costs and discounts on long-term debt (2)

2,257

3,212

9,336

12,672

Net capital expenditures (3)

(154,570)

(178,481)

(642,747)

(702,913)

Proceeds on disposals of property, plant and equipment (1)

594

1,037

3,381

2,653

Repayment of lease liabilities

(2,816)

(1,907)

(10,282)

(7,271)

Free cash flow (1)

143,055

87,274

475,765

424,083

Net capital expenditures in connection with network expansion projects

56,911

32,928

137,394

172,835

Free cash flow, excluding network expansion projects (1)

199,966

120,202

613,159

596,918

(1)

(2)

Included within financial expense.

(3)

Net capital expenditures reconciliation

Three months ended August 31

Years ended August 31

2024

2023

2024

2023

(In thousands of Canadian dollars)

Acquisition of property, plant and equipment

156,577

207,434

664,004

806,237

Subsidies received in advance recognized as a reduction of the cost of property, plant and equipment during the period

(2,007)

(28,953)

(21,257)

(103,324)

Net capital expenditures

154,570

178,481

642,747

702,913

Adjusted EBITDA reconciliation

Three months ended August 31

Years ended August 31

2024

2023

2024

2023

(In thousands of Canadian dollars)

Profit for the period

81,437

90,521

349,381

350,235

Income taxes

14,262

17,827

61,808

78,379

Financial expense

64,461

71,198

286,672

255,010

Impairment of property, plant and equipment, intangible assets and goodwill

15,229

—

15,229

88,000

Depreciation and amortization

183,650

157,140

678,429

625,060

Acquisition, integration, restructuring and other costs

12,177

15,239

63,298

36,245

Adjusted EBITDA

371,216

351,925

1,454,817

1,432,929

Net capital expenditures and free cash flow excluding network expansion projects reconciliations

Net capital expenditures

Three months ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

constant
currency

Net capital expenditures

154,570

(2,254)

152,316

178,481

(13.4)

(14.7)

Net capital expenditures in connection with network expansion projects

56,911

(576)

56,335

32,928

72.8

71.1

Net capital expenditures, excluding network expansion projects

97,659

(1,678)

95,981

145,553

(32.9)

(34.1)

Years ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

constant
currency

Net capital expenditures

642,747

(3,340)

639,407

702,913

(8.6)

(9.0)

Net capital expenditures in connection with network expansion projects

137,394

(780)

136,614

172,835

(20.5)

(21.0)

Net capital expenditures, excluding network expansion projects

505,353

(2,560)

502,793

530,078

(4.7)

(5.1)

Free cash flow

Three months ended August 31

2024

2023

(1)

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

constant
currency

Free cash flow (1)

143,055

(462)

142,593

87,274

63.9

63.4

Net capital expenditures in connection with network expansion projects

56,911

(576)

56,335

32,928

72.8

71.1

Free cash flow, excluding network expansion projects (1)

199,966

(1,038)

198,928

120,202

66.4

65.5

(1)

Years ended August 31

2024

2023

(1)

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

constant
currency

Free cash flow (1)

475,765

(932)

474,833

424,083

12.2

12.0

Net capital expenditures in connection with network expansion projects

137,394

(780)

136,614

172,835

(20.5)

(21.0)

Free cash flow, excluding network expansion projects (1)

613,159

(1,712)

611,447

596,918

2.7

2.4

(1)

Additional information

Additional information relating to the Corporation, including its Annual Information Form, is available on SEDAR+ at www.sedarplus.ca and on the Corporation’s website at corpo.cogeco.com.

About Cogeco Inc.

Cogeco Inc. is a North American leader in the telecommunications and media sectors. Through Cogeco Communications Inc., we provide world-class Internet, video and wireline phone services to 1.6 million residential and business subscribers in Canada and thirteen states in the United States. We also offer wireless services in most of our U.S. operating territory. Through Cogeco Media, we operate 21 radio stations in Canada, primarily in the province of Québec, as well as a news agency. We take pride in our strong presence in the communities we serve and in our commitment to a sustainable future. Both Cogeco Inc.’s and Cogeco Communications Inc.’s subordinate voting shares are listed on the Toronto Stock Exchange (TSX: CGO and CCA).

For information:
Investors
Troy Crandall
Head, Investor Relations
Cogeco Inc.
Tel.: 514 764-4600
troy.crandall@cogeco.com

Media
Claudja Joseph
Director, Communications & DEI
Cogeco Inc.
Tel.: 514 764-4600
claudja.joseph@cogeco.com

Conference Call:

Friday, November 1st, 2024 at 11:00 a.m. (Eastern Daylight Time)

A live audio of the analyst conference call will be available on both the Investor Relations and the Events and Presentations pages on Cogeco’s website. Financial analysts will be able to access the live conference call and ask questions. Media representatives may attend as listeners only. A recording of the conference call will be available on Cogeco’s website for a three-month period.

Please use the following dial-in number to access the conference call 10 minutes before the start of the conference:

Local – Toronto: 1 289 514-5100

Toll Free – North America: 1 800 717-1738

To join this conference call, participants are required to provide the operator with the name of the company hosting the call, that is, Cogeco Inc. or Cogeco Communications Inc.

SOURCE Cogeco Inc.

Technology

Pepperstone Appoints Andrew Turnbull to Lead Africa Strategy as Trading Markets Mature

Published

12 minutes ago

September 1, 2026

Nairobi-based appointment strengthens Pepperstone’s investment in Africa as mobile trading grows and regulators across the continent raise standards.

MELBOURNE, Australia, Sept. 1, 2026 /PRNewswire/ — Pepperstone, a global online trading provider serving clients in more than 160 countries, has appointed Andrew Turnbull as Head of Africa, strengthening its focus on one of the world’s fastest-evolving online trading regions. Based in Nairobi, Turnbull will lead Pepperstone’s strategy across the continent as traders increasingly turn to mobile-first platforms and regulators move to strengthen oversight of the sector.

Turnbull brings more than 20 years of experience in financial services, including senior roles at ODL Securities and FXCM Europe, where he led institutional sales and partnerships. His experience spans regulated FX and CFD markets, institutional relationships and business development across international markets.

The appointment also comes as Pepperstone invests in owning more of its technology, giving the business greater control over the trading experience and allowing it to respond more closely to the different needs of clients across individual markets.

“Africa is dozens of distinct regulatory environments and trader profiles,” said Marc Boever, Head of EMEA at Pepperstone. “That is why we are putting more resources on the ground and investing in people who understand the region. Andrew’s experience across regulated financial services and institutional partnerships, combined with his growing first-hand understanding of markets like Kenya, makes him the right person to lead our growth across the continent.”

Kenya, where Pepperstone is licensed under the Capital Markets Authority (CMA)*, was one of the first African countries to introduce a formal regulatory framework for online forex trading. That early move has helped create a more mature market, with regulated, licensed brokers increasingly trusted by traders, while Kenya’s experience offers a model for other African regulators looking to bring greater oversight to the sector.

“Kenya’s traders were among the first in Africa to get a properly regulated market to trade in, and that head start shows,” said Andrew Turnbull, Head of Africa at Pepperstone. “There is a growing appetite for online trading across the continent, but every market is different. I’m looking forward to building on Pepperstone’s presence here and working with our teams and partners to better understand and serve the different trading communities across Africa.”

Ends

* Pepperstone Markets Kenya Limited is licensed and regulated by Kenya’s Capital Markets Authority under licence number 128.

About Pepperstone: Pepperstone is a global fintech and CFD broker serving traders in more than 160 countries. The company provides access to forex, indices, commodities, shares, ETFs and digital asset markets through industry-leading platforms, competitive pricing and a strong regulatory framework.

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Technology

Cherubic Ventures Closes $68.88 Million Fund VI as AUM Surpasses $500 Million

Published

12 minutes ago

September 1, 2026

Early Investment Sudo AI Valued at Nearly $2B

TAIPEI, Sept. 1, 2026 /PRNewswire/ — Cherubic Ventures today announced the close of its sixth fund (Fund VI) at $68.88 million. The fund size reflects the auspicious meaning of the number eight in East Asian cultures, where it is traditionally associated with prosperity and good fortune. With this close, assets under management across the firm’s six funds have surpassed US$500 million.

Investors across all six funds include leading global institutional investors and foundations, as well as publicly listed companies, family offices, successful entrepreneurs and high-net-worth individuals.

Fund VI maintains the firm’s early-stage focus, investing in AI-native companies across infrastructure, developer tools, enterprise software, healthcare, physical AI and robotics. Sudo AI, a robotics startup in the portfolio, has reached a valuation of nearly $2 billion two years after its founding, joining the ranks of unicorns.

“After ten years, I am more certain than ever about why I chose to invest at the earliest stages,” said Matt Cheng, Founder & Solo GP of Cherubic Ventures. “Working alongside exceptional founders, finding a path through uncertainty, and ultimately changing an industry is what keeps driving me.”

Investing Across AI, From Infrastructure to Industry Applications

As AI reshapes industries, Cherubic Ventures continues to look for founders using the technology to build new products and redefine markets. Since 2024, the firm’s AI-native investments have spanned infrastructure, developer tools, enterprise software, healthcare, physical AI and robotics.

In robotics, Sudo AI was co-founded by Hao Su, a leading researcher in embodied AI and 3D vision and co-author of PointNet, and serial entrepreneur Robin Han. Its sudo R1 robotic system is trained through virtual simulation and can reliably handle objects it has never encountered without relying on real-world manipulation data. This addresses a key bottleneck to deploying robotics at scale. Cherubic Ventures was its earliest institutional investor.

Cherubic Ventures is also an early investor in Entire, the developer platform founded by former GitHub CEO Thomas Dohmke. The company raised US$60 million earlier this year, the largest seed round ever for a developer tools startup.

While Fund VI is still at an early stage, its portfolio companies have already raised more than $500 million in subsequent funding. Other notable investments include AI-powered patent technology platform Patlytics, along with healthcare and drug development companies Max AI, Generation Lab and therapiAI.

A Decade Alongside Founders, Supporting the Next Generation

Founded in 2015, Cherubic Ventures was among the first venture firms in the world to adopt the solo GP model. It has invested in more than 200 companies globally, with early investments including Hims & Hers, Flexport, Calm, Paidy, 91APP and Astranis.

Across its portfolio, Cherubic Ventures has been the earliest institutional investors in dozens of companies that went on to become unicorns. Hims & Hers is listed on the New York Stock Exchange and 91APP on the Taipei Exchange, while Paidy was acquired by PayPal for US$2.7 billion.

Fund VI marks the beginning of Cherubic Ventures’ second decade. “The past ten years have made me more certain that believing in founders before the answers are clear, and backing them through uncertainty, is at the heart of early-stage investing,” Cheng said. “In the next decade, we will continue to ‘Stay Early’ and work with the most exceptional founders to build the future we want to see.”

About Cherubic Ventures
Founded in 2015, Cherubic Ventures is a global early-stage venture capital firm that started in Taipei and has built a strong presence in the U.S. market. The firm backs outstanding founders from day one and was among the first venture firms in the world to adopt the solo GP model. Notable investments include Hims & Hers, Calm, Flexport, 91APP, Paidy, Formation Bio and Astranis. To date, Cherubic Ventures has invested in more than 200 startups and brings together more than 500 founders and investors in a distinctive global community.

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SOURCE Cherubic Ventures

Technology

Agentic AI Has Arrived. Is Your Workforce Ready to Leverage It?

Published

12 minutes ago

September 1, 2026

Enterprises are deploying AI agents faster than they are building the certified talent to run them. Closing that gap is now the real differentiator.

Authored by, Vikas Mathur, Vice President, Trainocate India

MUMBAI, India, Sept. 1, 2026 /PRNewswire/ — Across the enterprise programs we run every week at Trainocate, the conversation has changed. A year ago, leaders asked us what generative AI could do. Today they ask why their agentic pilot has not reached production. Agentic AI has arrived — the question is no longer whether it works, but whether the workforce is ready to leverage it.

The platforms have done their part. AWS, Microsoft, Google Cloud, Databricks and others have moved agent frameworks, orchestration layers and governance tooling into general availability. What has not kept pace is the workforce. Adoption forecasts keep climbing; the cancellation forecasts climb with them, and for reasons that have little to do with the models themselves.

40%+

of agentic AI projects are forecast to be scrapped by the end of 2027 — on escalating cost, unclear business value and inadequate risk controls.

Source: Gartner

Our own view, formed across thousands of enterprise learners, is simpler than any forecast: Technology is not the constraint. The certified, deployment-ready workforce is.

India’s AI Talent Equation: One Million Roles, One in Six Skilled

India has the demand and the ambition. The constraint is supply. Estimates put the national AI talent pool at 1.25 million by 2027 — real growth, but well short of a market compounding at 25–35% a year. On current trajectories the gap widens before it closes.

We see the consequence directly in client conversations. Skills mismatch, not headcount, is what delays deployment — and on most enterprise shortlists, demonstrable and certified capability now outranks the degree.

Figure: The agentic readiness gap — adoption is outpacing certified capability.

From Prompt Engineering to Agent Orchestration: Three Capability Shifts

From operator to orchestrator. Every prior automation wave asked people to use a tool. Agentic AI asks them to direct one. The working skill is decomposition — mapping a process into the steps an agent may own, the tool-calling boundaries it must respect and the human-in-the-loop checkpoints between them. That is delegation and process design before it is programming, which makes it teachable well beyond the engineering bench.

From reviewing output to governing outcomes. When AI drafts an email, a human reads it before it goes. When an agent provisions infrastructure or triggers a payment, reading it afterwards is too late. Enterprises need people fluent in least-privilege identity, data lineage and governance, evaluation harnesses, escalation thresholds, observability and cost control. In our experience, this is where most agentic programs are thinnest.

From individual courses to cross-functional readiness. One production agentic workflow touches data engineering, application development, identity and security, LLMOps and the business function it serves. Certifying one persona while the rest stand still guarantees the pilot dies at handover. The unit of skilling must become the team.

What we see

Agentic pilots rarely stall on model quality. They stall because too few people can scope what an agent may own, design its guardrails, and stay accountable when it acts alone.

Trainocate enterprise delivery experience

Why Vendor-Authorized Certification Is the New Deployment Prerequisite

Credentials are often said to date quickly in a field moving this fast. We find the opposite. Agentic concepts are universal; implementation is not. Identity and access design, data governance, retrieval and grounding, model selection, evaluation and cost management behave differently on AWS, Microsoft Azure, Google Cloud and Databricks — and those differences decide whether an agent survives production.

Vendor-authorized certification remains the only independently verifiable proof that an engineer can build and operate on a given stack. Foundational credentials also give HR, finance, risk and procurement a shared vocabulary with engineering — and agentic decisions are risk decisions as much as technical ones.

2 in 5

Employers now prefer demonstrable AI skills and certifications over academic degrees. Skills-based hiring is no longer emerging — it is the default.

Source: NASSCOM–Indeed India AI Talent Report, 2026

Experiential Learning: Turning Training Investment into Production Capability

Nobody learns to supervise an autonomous system from a slide. Trainocate’s Experiential Learning Model was built on that premise — one continuous journey rather than a catalog of courses:

Learn from practitioners. Instructor-led and virtual instructor-led training delivered by vendor-authorized, actively certified instructors.Reinforce on demand. Self-paced digital learning and curated learning paths that keep pace with quarterly platform releases.Build in live environments. Hands-on labs in real cloud sandboxes — agents, tool-calling, guardrails and failure modes, not screenshots.Prove it on real work. Capstone projects mapped to the organization’s own agentic and cloud use cases.Certify the capability. Structured exam preparation and readiness checks that convert learning into a verifiable credential.Measure the outcome. Governance dashboards tracking completion, certification attainment and skill progression for L&D and business sponsors.

That model now runs through our AI Mastery Program, which spans foundational to advanced tracks for both business and technical roles across AWS, Microsoft, Google Cloud, Databricks and vendor-neutral content — with agentic system design, multi-agent orchestration and AI governance sitting in the advanced tiers, and sandbox labs and industry capstones throughout.

The results hold up: Close to 80% certification attainment across enterprise programs and a 4.90/5.00 delivery CSAT. As an authorized training partner for AWS, Microsoft, Google Cloud, Databricks and more, operating across 24 countries, we have run this model at scale — over one lakh professionals certified within a single global enterprise account, and agentic AI labs delivered across six Indian cities this year. Four consecutive AWS Global Training Partner of the Year awards and six appearances on the Training Industry Top 20 suggest the model travels.

30%

of enterprise application software revenue will be driven by agentic AI by 2035 — up from 2% in 2025.

Source: Gartner

A Twelve-Month Skilling Blueprint for CHROs and L&D Leaders

Assess against use cases, not catalogs. Benchmark capability against the specific agentic workflows the business intends to run.Build a spine, not a stack. Foundational AI and cloud fluency organization-wide; certified specialization for those who will design, secure and govern agents.Skill the workflow, not the individual. Move cross-functional cohorts together — data, application, security, business — so nothing stalls at handover.Instrument on outcomes. Track certification attainment, time-to-productivity and pilot-to-production conversion. Seat-hours measure activity, not readiness.

Two Budget Cycles: The Window for Workforce Readiness

15%

of day-to-day work decisions will be made autonomously by 2028 — up from effectively zero in 2024.

Source: Gartner

That is not a distant horizon. It is two budget cycles away.

Models are becoming a commodity; every enterprise buys them at roughly the same price. The durable differentiator is the depth of certified talent that can point those models at the right problems and stay accountable for what they do. Treat skilling as infrastructure — continuous, measured, certified — and your agents scale. Treat it as an event and the pilot stays a pilot.

Agentic AI has arrived. The question every board should be asking is whether its workforce is ready to leverage it.

Build a Certified, Agent-Ready Workforce

Trainocate partners with enterprises to build agentic AI and cloud capability at scale — from foundational fluency to certified specialization across AWS, Microsoft, Google Cloud, Databricks and more, delivered through our Experiential Learning Model and AI Mastery Program. To design a skilling roadmap for your workforce, write to cloudacademy@trainocate.com or call +91 9223361686.

About Trainocate

Trainocate is a global IT training and workforce skilling organization and an authorized training partner for AWS, Microsoft, Google Cloud, Databricks and more, operating across 24 countries. Trainocate delivers cloud, data and AI capability to enterprises through its Experiential Learning Model and AI Mastery Program, combining instructor-led training, self-paced digital learning, hands-on sandbox labs, industry capstones and vendor-authorized certification. The company is a four-time consecutive AWS Global Training Partner of the Year and has appeared six times on the Training Industry Top 20. Trainocate India operates as Networks India Pvt Ltd. For more information, visit www.trainocate.com/in.

About the Author

Vikas Mathur is Vice President at Trainocate India, where he leads the Cloud, Data & AI competency business. He works with enterprise L&D and technology leaders across India and Asia on cloud and AI workforce readiness, and can be reached at cloudacademy@trainocate.com or +91 9223361686.

Data sources referenced: Gartner (agentic AI adoption, project cancellation, governance maturity, autonomous-decision and market-share forecasts, 2025–26); McKinsey (State of AI, agent pilot-to-production); NASSCOM and MeitY (India AI job demand and AI-skilled share); NASSCOM–Deloitte (AI talent pool projection); NASSCOM–Indeed India AI Talent Report 2026 (skills-based hiring). Trainocate figures are from our own enterprise delivery data.

Contact: cloudacademy@trainocate.com | +91 9223361686

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