MONTREAL – Subscriber growth across the board fuelled a strong second quarter of fiscal 2006, ended February 28th, for Cogeco Cable.
Capex guidance as well as revenue guidance for the year have increased thanks to high demand for all of the company’s products, said company president and CEO Louis Audet during a conference call with financial analysts Monday. For example, right now the company is booking 900 to 1,000 new phone customer install orders per week.
"We are pleased with the trend of these results. We have improved our revenue by 6.8%, operating income before amortization by 7.7% and net income by 81.7%," said Audet.
"The number of basic service customers improved from a net loss of 751 to a net gain of 3,505 if we compare the second quarters of 2005 and 2006. During the quarter, digital video and high-speed Internet (HSI) service customers grew by about 24,500 and 17,500 customers respectively. Our digital telephony offering is creating a snowball effect with more customers choosing the bundled offer of two or three services. We are pleased to see more and more customers enjoying our services and we are committed to bring them the products and levels of service they deserve."
Voice over IP customers rose from 9,597 at the end of the first quarter to 16,504 as of February 28th.
Audet also noted during the call that the company is still studying acquisition and was close to doing something at one point. However, a $20.3 million deposit in escrow, intended for a potential acquisition in Europe is instead "being returned with accumulated interest."
Due to a confidentiality agreement, Audet said he could not answer any questions on the proposed deal. More than one published report said Cogeco was looking hard at Portuguese operator Cabovisao.
Cogeco Cable customers will also not be getting wireless from the company any time soon. Audet said the company would prefer to concentrate on its wired voice rollout and that a wireless portion of an expanded bundle would claim too many company resources, so Cogeco has "postponed indefinitely negotiations on this wireless opportunity," said Audet.
As of February 28, Cogeco had 835,841 basic customers, 318,101 high speed Internet customers 41.9% penetration), and 293,166 digital cable customers (35.8% penetration).
