Cogeco Cable Reports Second Quarter 2008 Financial Results
Thursday, April 10th, 2008
MONTREAL, QUEBEC — Today, Cogeco Cable Inc. (TSX:CCA) announced its financial results for the second quarter and first six months ended February 29, 2008.
Canadian Operations
Net additions
Quarters ended Six months ended
--------------------------------------------
February February February February February
29, 29, 28, 29, 28,
2008 2008 2007 2008 2007
-----------------------------------------------------------------------------------------
RGUs(2) 1,912,341 51,007 64,133 123,833 157,148
Basic Cable service customers 859,090 1,869 5,277 9,933 21,517
HSI service customers(3) 456,188 15,058 20,428 40,352 49,363
Digital Television service customers 414,011 17,879 13,961 34,132 35,185
Telephony service customers 183,052 16,201 24,467 39,416 51,083
% of Penetration(1)
--------------------------------------------------------------------------
February 29, February 28,
2008 2007
--------------------------------------------------------------------------
RGUs(2) - Basic Cable service
HSI service customers(3) 56.4 49.3
Digital Television service customers 49.1 43.3
Telephony service customers 27.5 16.2
(1) As a percentage of Basic Cable service customers in areas served.
(2) Represent the sum of Basic Cable service, HSI service, Digital Television service and Telephony service customers.
(3) Customers subscribing only to HSI services totalled 74,803 as at February 29, 2008 compared to 63,884 as at February 28, 2007.
Fiscal 2008 second quarter RGU net additions were lower than for the same period last year and reflect an early sign of maturation in most services. The number of net additions for Basic Cable stood at 1,869 customers compared to 5,277 customers for the same period last year. The lower net additions are mainly due to the expiry of certain promotional offers. Telephony customers grew by 16,201 to reach 183,052 compared to 24,467 for the same period last year. The lower growth is mostly attributable to the increased penetration in areas where the service is already offered and to fewer new areas where the service was launched. Telephony service coverage, as a percentage of homes passed, has now reached 80% compared to 74% last year.
The number of HSI net additions stood at 15,058 customers compared to 20,428 customers for the same period last year. During the second quarter of 2008, the growth in HSI customer net additions is mostly due to the enhancement of the product offering, the impact of the bundled offer of Television, HSI and Telephony services (Cogeco Complete Connection), and promotional activities.
The Digital Television service net additions stood at 17,879 customers compared to 13,961 customers for the same period last year. The increase in net additions this quarter compared to the same quarter last year is due to targeted marketing initiatives in 2008 to improve the penetration rate. It also reflects the continuous strong interest for High Definition technology.
European Operations
“¢ Cabovisão – Televisão por Cabo, S.A. (“Cabovisao”) continued its Digital Television service deployment.
Net additions
Quarters ended Six months ended
------------------------------------------------------------------------------------
February February February February February
29, 29, 28, 29, 28,
2008 2008 2007 2008 2007
------------------------------------------------------------------------------------
RGUs(2) 712,544 5,189 20,266 15,387 41,530
Basic Cable service customers 301,660 2,724 6,606 7,657 13,859
HSI service customers 165,925 2,096 7,308 5,902 15,385
Telephony service customers 244,959 369 6,352 1,828 12,286
% of Penetration(1)
-------------------------------------------------------------------------
February 29, February 28,
2008 2007
-------------------------------------------------------------------------
RGUs(2) - Basic Cable service
HSI service customers 55.0 53.5
Telephony service customers 81.2 83.0
(1) As a percentage of Basic Cable service customers in areas served.
(2) Represent the sum of Basic Cable service, HSI service and Telephony service customers.
Fiscal 2008 second quarter and first six-month period were marked by intense price competition in the Portuguese market, and as a result, all services generated lower customer growth compared to the same period last year. Fiscal 2008 second quarter Basic Cable service grew by 2,724 customers compared to 6,606 in 2007, HSI service increased by 2,096 customers compared to 7,308 in 2007 and Telephony service grew by 369 customers compared to 6,352 for the same period of the preceding year. RGUs grew at a slower pace since competition offered deep discounts to attract customers during most of the first six-month period. Cabovisao did not match the competition’s highly discounted offering. However, since then, the pricing environment has become more rational. Cabovisao’s performance since its acquisition by Cogeco Cable has exceeded management’s original business plan and growth prospects for the future remain excellent in management’s view.
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