Cogeco Communications Releases its Financial Results for the Second Quarter of Fiscal 2025

CNW Group

Wed, Apr 9, 2025, 3:21 PM 25 min read

Three-year transformation program fully underway.
Canadian wireless launch preparation on track, with customer pre-registration now ongoing.
Year-over-year increase in customer satisfaction, in both Canada and the United States.
Fiscal 2025 financial guidelines maintained.
A quarterly dividend of $0.922 per share was declared, representing an 8.0% increase over the prior year.

MONTRÉAL, April 9, 2025 /CNW/ - Today, Cogeco Communications Inc. (TSX: CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the second quarter ended February 28, 2025.

"Our results for the second quarter of fiscal 2025 demonstrate that our new operating model, focused on increasing our agility and competitiveness, is gaining traction," stated Frédéric Perron, President and CEO. "We are particularly pleased with the progress we are making on our transformation initiatives, leading to increased customer satisfaction, while alleviating industry revenue headwinds with ongoing cost reductions.

"Our Internet subscriber growth in Canada remained strong, driven by both our Cogeco and oxio brands. We continued to see modest sequential improvements in Internet subscriber metrics in the U.S., began scaling up our U.S. wireless sales, and kept our Canadian wireless launch preparation on schedule.

"Our three-year transformation centered on synergies, digitization, advanced analytics, wireless, and network expansion is beginning to bear fruit. We thank our employees for their hard work and dedication, and our customers and stakeholders for their ongoing support."

Consolidated Financial Highlights

Three months ended	February 28, 2025	February 29, 2024	⁽¹⁾	Change	Change in constant currency	⁽²⁾
(In thousands of Canadian dollars, except % and per share data) (unaudited)	$	$		%	%
Revenue	732,426	730,501		0.3	(2.7)
Adjusted EBITDA ⁽²⁾	356,499	347,112		2.7	(0.1)
Adjusted EBITDA margin ⁽²⁾	48.7 %	47.5 %
Profit for the period	79,637	96,562		(17.5)
Profit for the period attributable to owners of the Corporation	74,674	93,681		(20.3)
Adjusted profit attributable to owners of the Corporation ⁽²⁾⁽³⁾	80,693	94,054		(14.2)

Cash flows from operating activities	253,212	285,434		(11.3)
Free cash flow ⁽¹⁾⁽²⁾	116,603	101,799		14.5	12.8
Free cash flow, excluding network expansion projects ⁽¹⁾⁽²⁾	132,176	126,189		4.7	3.3

Acquisition of property, plant and equipment	159,371	180,247		(11.6)
Net capital expenditures ⁽²⁾⁽⁴⁾	157,895	170,769		(7.5)	(10.7)
Net capital expenditures, excluding network expansion projects ⁽²⁾	142,322	146,379		(2.8)	(6.4)

Capital intensity ⁽²⁾	21.6 %	23.4 %
Capital intensity, excluding network expansion projects ⁽²⁾	19.4 %	20.0 %

Diluted earnings per share	1.76	2.20		(20.0)
Adjusted diluted earnings per share ⁽²⁾⁽³⁾	1.90	2.21		(14.0)

Operating results

For the second quarter of fiscal 2025 ended on February 28, 2025:

Revenue increased by 0.3% to $732.4 million. On a constant currency basis⁽²⁾, revenue decreased by 2.7%, mainly explained as follows:
- American telecommunications' revenue decreased by 4.5% on a constant currency basis (increase of 1.5% as reported), mainly due to a decline in our subscriber base, especially for entry-level services, and to a higher proportion of customers subscribing to Internet-only services. The decline was offset in part by a better product mix.
- Canadian telecommunications' revenue decreased by 0.9%, mainly due to a lower revenue per customer as a result of a decline in video and wireline phone service subscribers as an increasing proportion of customers subscribe to Internet-only services, as well as a competitive pricing environment, partly offset by the cumulative effect of high-speed Internet service additions over the past years, including from network expansion projects, as well as from the Niagara Regional Broadband Network acquisition completed on February 5, 2024.
Adjusted EBITDA increased by 2.7% to $356.5 million. On a constant currency basis, adjusted EBITDA remained stable, driven by cost reduction initiatives and operating efficiencies across the Corporation as a result of our ongoing transformation program, offset by lower revenue in both the American and Canadian telecommunications segments, and higher operating expenses in the Canadian telecommunications segment, in part to drive subscriber growth.
- Canadian telecommunications adjusted EBITDA decreased by 3.2%, or 2.8% in constant currency.
- American telecommunications adjusted EBITDA increased by 6.8%, or 0.5% in constant currency.
Profit for the period amounted to $79.6 million, of which $74.7 million, or $1.76 per diluted share, was attributable to owners of the Corporation compared to $96.6 million, $93.7 million, and $2.20 per diluted share, respectively, in the comparable period of fiscal 2024. The decreases in profit for the period and profit attributable to owners of the Corporation resulted mainly from higher depreciation and amortization expense, acquisition, integration, restructuring and other costs and income tax expense, partly offset by lower financial expense and the impact of the appreciation of the US dollar against the Canadian dollar.
- Adjusted profit attributable to owners of the Corporation⁽³⁾ was $80.7 million, or $1.90 per diluted share⁽³⁾, compared to $94.1 million, or $2.21 per diluted share, last year.
Net capital expenditures were $157.9 million, a decrease of 7.5% compared to $170.8 million in the same period of the prior year. In constant currency, net capital expenditures⁽²⁾ were $152.6 million, a decrease of 10.7% compared to last year, mainly due to lower spending in the Canadian telecommunications segment, primarily resulting from lower capital spending related to customer premise equipment and the timing of certain initiatives, offset in part by higher spending in the American telecommunications segment, mainly due to higher costs in relation to customer premise equipment.
- Excluding network expansion projects, net capital expenditures were $142.3 million, a decrease of 2.8% compared to $146.4 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects⁽²⁾ were $137.1 million, a decrease of 6.4% compared to last year, mainly due to the same factors as above.
- Fibre-to-the-home network expansion projects continued, mostly in Canada, with the addition of close to 7,000 homes passed during the second quarter of fiscal 2025.
- Capital intensity was 21.6% compared to 23.4% last year. Excluding network expansion projects, capital intensity was 19.4% compared to 20.0% in the same period of the prior year.
Acquisition of property, plant and equipment decreased by 11.6% to $159.4 million, mainly resulting from lower spending.
Free cash flow⁽¹⁾ increased by 14.5%, or 12.8% in constant currency, and amounted to $116.6 million, or $114.8 million in constant currency⁽²⁾, mainly due to lower net capital expenditures and financial expense, offset in part by higher acquisition, integration, restructuring and other costs. Free cash flow, excluding network expansion projects⁽¹⁾ increased by 4.7%, or 3.3% in constant currency, and amounted to $132.2 million, or $130.3 million in constant currency.
Cash flows from operating activities decreased by 11.3% to $253.2 million, mostly due to lower cash from other non-cash operating activities, primarily due to the timing of payments of trade and other payables, as well as the timing of grants received in connection with network expansion projects and the collection of trade accounts receivable, and higher income taxes paid, partly offset by lower interest paid.
Cogeco Communications maintains its fiscal 2025 financial guidelines as issued on October 31, 2024.
At its April 9, 2025 meeting, the Board of Directors of Cogeco Communications declared a quarterly eligible dividend of $0.922 per share, an increase of 8.0% compared to $0.854 per share in the comparable quarter of fiscal 2024.

___________________________
(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, which includes proceeds from sale and leaseback transactions. 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. Adjusted EBITDA margin and capital intensity are supplementary financial 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, capital intensity, excluding network expansion projects 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 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.

Financial highlights

					Change in constant currency						Change in constant currency
Three and six months ended	February 28, 2025	February 29, 2024	⁽¹⁾	Change	Change in constant currency	^{(2) (3)}	February 28, 2025	February 29, 2024	⁽¹⁾	Change	Change in constant currency	^{(2) (3)}
(In thousands of Canadian dollars, except % and per share data)	$	$		%	%		$	$		%	%
Operations
Revenue	732,426	730,501		0.3	(2.7)		1,471,121	1,478,190		(0.5)	(2.1)
Adjusted EBITDA ⁽³⁾	356,499	347,112		2.7	(0.1)		721,714	706,072		2.2	0.6
Adjusted EBITDA margin ⁽³⁾	48.7 %	47.5 %					49.1 %	47.8 %
Acquisition, integration, restructuring and other costs (gains) ⁽⁴⁾	8,035	885		—			(1,923)	3,501		—
Profit for the period	79,637	96,562		(17.5)			186,797	192,314		(2.9)
Profit for the period attributable to owners of the Corporation	74,674	93,681		(20.3)			175,262	183,174		(4.3)
Adjusted profit attributable to owners of the Corporation⁽³⁾⁽⁵⁾	80,693	94,054		(14.2)			171,367	197,780		(13.4)
Cash flow
Cash flows from operating activities	253,212	285,434		(11.3)			472,077	522,416		(9.6)
Free cash flow ⁽¹⁾⁽³⁾	116,603	101,799		14.5	12.8		265,461	239,647		10.8	10.0
Free cash flow, excluding network expansion projects ⁽¹⁾⁽³⁾	132,176	126,189		4.7	3.3		302,833	295,697		2.4	1.7
Acquisition of property, plant and equipment	159,371	180,247		(11.6)			312,614	333,796		(6.3)
Net capital expenditures⁽³⁾⁽⁶⁾	157,895	170,769		(7.5)	(10.7)		308,540	317,196		(2.7)	(4.6)
Net capital expenditures, excluding network expansion projects ⁽³⁾	142,322	146,379		(2.8)	(6.4)		271,168	261,146		3.8	1.6
Capital intensity ⁽³⁾	21.6 %	23.4 %					21.0 %	21.5 %
Capital intensity, excluding network expansion projects ⁽³⁾	19.4 %	20.0 %					18.4 %	17.7 %
Per share data ⁽⁷⁾
Earnings per share
Basic	1.77	2.21		(19.9)			4.17	4.23		(1.4)
Diluted	1.76	2.20		(20.0)			4.13	4.21		(1.9)
Adjusted diluted ⁽³⁾⁽⁵⁾	1.90	2.21		(14.0)			4.04	4.55		(11.2)
Dividends per share	0.922	0.854		8.0			1.844	1.708		8.0

(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, which includes proceeds from sale and leaseback transactions. Proceeds from sale and leaseback and other disposals of property, plant and equipment amounted to $0.9 million and $20.5 million for the three and six-month periods ended February 28, 2025, respectively ($1.6 million and $1.9 million, respectively, for the same periods of fiscal 2024). 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 rates of the comparable periods of the prior year. For the three and six-month periods ended February 29, 2024, the average foreign exchange rates used for translation were 1.3452 USD/CDN and 1.3553 USD/CDN, respectively.
(3)	Adjusted EBITDA and net capital expenditures are total of segments measures. Adjusted EBITDA margin and capital intensity are supplementary financial 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, capital intensity, excluding network expansion projects 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 ended February 28, 2025, acquisition, integration, restructuring and other costs were mainly related to restructuring costs incurred, mostly in connection with additional costs related to the new organizational structure announced in May 2024 and other cost optimization initiatives, as well as costs associated with the configuration and customization related to cloud computing and other arrangements. For the six-month period ended February 28, 2025, acquisition, integration, restructuring and other costs (gains) were mostly related to a $13.8 million non-cash gain recognized during the first quarter of fiscal 2025 in connection with a sale and leaseback transaction of a building in Ontario, offset in part by restructuring costs incurred and costs associated with the configuration and customization related to cloud computing and other arrangements. For the three and six-month periods ended February 29, 2024, acquisition, integration, restructuring and other costs were mostly related to costs associated with the configuration and customization related to cloud computing and other arrangements, partly offset by a $4.2 million reversal of a charge, recognized during the second quarter following the Copyright Board decision issued in January 2024 on the redetermination of the 2014-2018 royalty rates.
(5)	Excludes the impact of acquisition, integration, restructuring and other costs (gains), and gains/losses on debt modification and/or extinguishment, all net of tax and non-controlling interest.
(6)	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.
(7)	Per multiple and subordinate voting share.


As at	February 28, 2025	August 31, 2024
(In thousands of Canadian dollars)	$	$
Financial condition
Cash and cash equivalents	141,073	76,335
Total assets	10,152,322	9,675,009
Long-term debt
Current	353,486	361,808
Non-current	4,688,512	4,448,261
Net indebtedness ⁽¹⁾	4,971,544	4,803,629
Equity attributable to owners of the Corporation	3,176,747	2,979,691

(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 three and six-month periods ended February 28, 2025, available on SEDAR+ at www.sedarplus.ca.

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 Communications Inc.'s ("Cogeco Communications" 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 Communications 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 Communications 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, trade tariffs, 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. 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 and of the fiscal 2025 second-quarter MD&A. These factors are not intended to represent a complete list of the factors that could affect Cogeco Communications 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 Communications' 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 Corporation's MD&A for the three and six-month periods ended February 28, 2025, the Corporation's condensed interim consolidated financial statements and the notes thereto for the same periods prepared in accordance with IFRS^® Accounting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") and the Corporation's fiscal 2024 Annual Report.

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 Communications. These financial measures are reviewed in assessing the performance of Cogeco Communications 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 three and six-month periods ended February 28, 2025, available on SEDAR+ at www.sedarplus.ca. The following non-IFRS Accounting Standards measures are used as a component of Cogeco Communications' non-IFRS Accounting Standards ratios.


Specified non-IFRS Accounting Standards measures	Used in the component of the following non-IFRS Accounting Standards ratios
Adjusted profit attributable to owners of the Corporation	Adjusted diluted earnings per share
Constant currency basis	Change in constant currency
Net capital expenditures, excluding network expansion projects	Capital intensity, excluding network expansion projects

Financial measures presented on a constant currency basis for the three and six-month periods ended February 28, 2025 are translated at the average foreign exchange rate of the comparable periods of the prior year, which were 1.3452 USD/CDN and 1.3553 USD/CDN, respectively.

Constant currency basis and foreign exchange impact reconciliation

Consolidated


Three months ended	February 28, 2025			February 29, 2024	⁽¹⁾		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual		Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$		%	%
Revenue	732,426	(21,406)	711,020	730,501		0.3	(2.7)
Operating expenses	371,006	(11,558)	359,448	378,151		(1.9)	(4.9)
Management fees – Cogeco Inc.	4,921	—	4,921	5,238		(6.1)	(6.1)
Adjusted EBITDA	356,499	(9,848)	346,651	347,112		2.7	(0.1)
Free cash flow⁽¹⁾	116,603	(1,760)	114,843	101,799		14.5	12.8
Net capital expenditures	157,895	(5,343)	152,552	170,769		(7.5)	(10.7)

(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, which includes proceeds from sale and leaseback transactions. Comparative figures were restated to conform to the current presentation.


Six months ended	February 28, 2025			February 29, 2024	⁽¹⁾		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual		Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$		%	%
Revenue	1,471,121	(24,129)	1,446,992	1,478,190		(0.5)	(2.1)
Operating expenses	739,564	(12,998)	726,566	761,642		(2.9)	(4.6)
Management fees – Cogeco Inc.	9,843	—	9,843	10,476		(6.0)	(6.0)
Adjusted EBITDA	721,714	(11,131)	710,583	706,072		2.2	0.6
Free cash flow⁽¹⁾	265,461	(1,964)	263,497	239,647		10.8	10.0
Net capital expenditures	308,540	(6,030)	302,510	317,196		(2.7)	(4.6)

(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, which includes proceeds from sale and leaseback transactions. Comparative figures were restated to conform to the current presentation.

Canadian telecommunications segment

Three months ended

February 28, 2025

February 29, 2024

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

370,211

—

370,211

373,479

(0.9)

Operating expenses

177,719

(634)

177,085

174,720

1.7

1.4

Adjusted EBITDA

192,492

634

193,126

198,759

(3.2)

(2.8)

Net capital expenditures

74,108

(580)

73,528

106,345

(30.3)

(30.9)

Six months ended

February 28, 2025

February 29, 2024

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

747,477

—

747,477

749,927

(0.3)

Operating expenses

355,507

(731)

354,776

354,814

0.2

—

Adjusted EBITDA

391,970

731

392,701

395,113

(0.8)

(0.6)

Net capital expenditures

148,269

(700)

147,569

194,181

(23.6)

(24.0)

American telecommunications segment

Three months ended

February 28, 2025

February 29, 2024

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

362,215

(21,406)

340,809

357,022

1.5

(4.5)

Operating expenses

184,506

(10,911)

173,595

190,672

(3.2)

(9.0)

Adjusted EBITDA

177,709

(10,495)

167,214

166,350

6.8

0.5

Net capital expenditures

80,402

(4,756)

75,646

62,855

27.9

20.4

Six months ended

February 28, 2025

February 29, 2024

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

723,644

(24,129)

699,515

728,263

(0.6)

(3.9)

Operating expenses

367,123

(12,255)

354,868

383,743

(4.3)

(7.5)

Adjusted EBITDA

356,521

(11,874)

344,647

344,520

3.5

—

Net capital expenditures

154,129

(5,319)

148,810

118,708

29.8

25.4

Adjusted profit attributable to owners of the Corporation


	Three months ended		Six months ended
	February 28, 2025	February 29, 2024	February 28, 2025	February 29, 2024
(In thousands of Canadian dollars)	$	$	$	$
Profit for the period attributable to owners of the Corporation	74,674	93,681	175,262	183,174
Acquisition, integration, restructuring and other costs (gains)	8,035	885	(1,923)	3,501
Loss on debt extinguishment ⁽¹⁾	—	—	—	16,880
Tax impact for the above items	(1,861)	(219)	(1,580)	(5,380)
Non-controlling interest impact for the above items	(155)	(293)	(392)	(395)
Adjusted profit attributable to owners of the Corporation	80,693	94,054	171,367	197,780

(1)	Included within financial expense.

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


	Three months ended			Six months ended
	February 28, 2025	February 29, 2024	⁽¹⁾	February 28, 2025	February 29, 2024	⁽¹⁾
(In thousands of Canadian dollars)	$	$		$	$
Cash flows from operating activities	253,212	285,434		472,077	522,416
Changes in other non-cash operating activities	24,343	2,253		98,517	55,188
Income taxes paid (received)	7,443	(7,628)		14,082	(4,725)
Current income taxes	(9,670)	(9,189)		(24,298)	(16,417)
Interest paid	62,195	68,288		123,666	132,260
Financial expense	(63,003)	(68,163)		(128,492)	(151,457)
Loss on debt extinguishment⁽²⁾	—	—		—	16,880
Amortization of deferred transaction costs and discounts on long-term debt ⁽²⁾	2,228	2,007		3,692	4,681
Net capital expenditures⁽³⁾	(157,895)	(170,769)		(308,540)	(317,196)
Proceeds from sale and leaseback and other disposals of property, plant and equipment ⁽¹⁾	931	1,644		20,544	1,899
Repayment of lease liabilities	(3,181)	(2,078)		(5,787)	(3,882)
Free cash flow⁽¹⁾	116,603	101,799		265,461	239,647
Net capital expenditures in connection with network expansion projects	15,573	24,390		37,372	56,050
Free cash flow, excluding network expansion projects⁽¹⁾	132,176	126,189		302,833	295,697

(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, which includes proceeds from sale and leaseback transactions. Comparative figures were restated to conform to the current presentation.
(2)	Included within financial expense.
(3)	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.

Net capital expenditures reconciliation


	Three months ended		Six months ended
	February 28, 2025	February 29, 2024	February 28, 2025	February 29, 2024
(In thousands of Canadian dollars)	$	$	$	$
Acquisition of property, plant and equipment	159,371	180,247	312,614	333,796
Subsidies received in advance recognized as a reduction of the cost of property, plant and equipment during the period	(1,476)	(9,478)	(4,074)	(16,600)
Net capital expenditures	157,895	170,769	308,540	317,196

Adjusted EBITDA reconciliation


	Three months ended		Six months ended
	February 28, 2025	February 29, 2024	February 28, 2025	February 29, 2024
(In thousands of Canadian dollars)	$	$	$	$
Profit for the period	79,637	96,562	186,797	192,314
Income taxes	22,904	17,820	49,529	35,918
Financial expense	63,003	68,163	128,492	151,457
Depreciation and amortization	182,920	163,682	358,819	322,882
Acquisition, integration, restructuring and other costs (gains)	8,035	885	(1,923)	3,501
Adjusted EBITDA	356,499	347,112	721,714	706,072

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

Net capital expenditures


Three months ended	February 28, 2025			February 29, 2024		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual	Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$	%	%
Net capital expenditures	157,895	(5,343)	152,552	170,769	(7.5)	(10.7)
Net capital expenditures in connection with network expansion projects	15,573	(73)	15,500	24,390	(36.2)	(36.4)
Net capital expenditures, excluding network expansion projects	142,322	(5,270)	137,052	146,379	(2.8)	(6.4)


Six months ended	February 28, 2025			February 29, 2024		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual	Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$	%	%
Net capital expenditures	308,540	(6,030)	302,510	317,196	(2.7)	(4.6)
Net capital expenditures in connection with network expansion projects	37,372	(89)	37,283	56,050	(33.3)	(33.5)
Net capital expenditures, excluding network expansion projects	271,168	(5,941)	265,227	261,146	3.8	1.6

Free cash flow


Three months ended	February 28, 2025			February 29, 2024	⁽¹⁾		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual		Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$		%	%
Free cash flow⁽¹⁾	116,603	(1,760)	114,843	101,799		14.5	12.8
Net capital expenditures in connection with network expansion projects	15,573	(73)	15,500	24,390		(36.2)	(36.4)
Free cash flow, excluding network expansion projects⁽¹⁾	132,176	(1,833)	130,343	126,189		4.7	3.3

(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, which includes proceeds from sale and leaseback transactions. Comparative figures were restated to conform to the current presentation.


Six months ended	February 28, 2025			February 29, 2024	⁽¹⁾		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual		Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$		%	%
Free cash flow⁽¹⁾	265,461	(1,964)	263,497	239,647		10.8	10.0
Net capital expenditures in connection with network expansion projects	37,372	(89)	37,283	56,050		(33.3)	(33.5)
Free cash flow, excluding network expansion projects⁽¹⁾	302,833	(2,053)	300,780	295,697		2.4	1.7

(1)

Additional information

Additional information relating to the Corporation is available on SEDAR+ at www.sedarplus.ca and on the Corporation's website at corpo.cogeco.com.

About Cogeco Communications Inc.

Cogeco Communications Inc. is a leading telecommunications provider committed to bringing people together through powerful communications and entertainment experiences. 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. Our services are marketed under the Cogeco and oxio brands in Canada, and under the Breezeline brand in the U.S. We take pride in our strong presence in the communities we serve and in our commitment to a sustainable future. Cogeco Communications Inc.'s subordinate voting shares are listed on the Toronto Stock Exchange (TSX: CCA).

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

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

Conference Call:	Thursday, April 10, 2025 at 11:00 a.m. (Eastern Daylight Time)

	A live audio webcast of the analyst call will be available on both the Investor Relations and the Events and Presentations pages of Cogeco Communications' 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 Communications' 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.