Cogeco’s Portuguese business drags down bottom line

14 Apr 2009

Canadian triple-play cableco Cogeco was forced to make a write-down of CAD399.6 million (USD326.4 million) in its fiscal second quarter ended 28 February 2009, largely the result of deteriorating performance at its Portuguese subsidiary Cabovisao. According to the company’s press release, the non-cash impairment loss – almost 70% of the value of Cabovisao – was a result of competitive pressure causing considerably greater subscriber losses than originally anticipated. Net of related income taxes and non-controlling interest, the write-off for the parent group amounted to CAD124 million, and consolidated net loss amounted to CAD115.3 million in the second quarter, compared to net income of CAD15.9 million in the same period of last year. Cabovisao’s number of revenue generating units (RGUs) stood at 690,000 at end-February 2009, down from 725,000 at end-August 2008. In the same six months, Cogeco’s Canadian operations saw a net increase of 113,000 RGUs to reach a total of 2.105 million. During its second fiscal quarter, the operator’s high speed internet customers in Ontario and Quebec crossed the half a million mark, ending February at 503,500, up from 473,500 at end-August 2008, and it also chalked up a quarter of a million Canadian cable telephony subscribers, reaching 255,000 at end-February, up from 220,000 six months previously.

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