Cogeco Communications (TSE:CCA) reported strong free cash flow in its fiscal third quarter, even as management described ongoing pressure in its U.S. cable business and outlined steps aimed at improving performance over the coming quarters.
President and CEO Fréd Perron said the company generated CAD 169 million in free cash flow during the quarter, bringing cumulative free cash flow after three quarters to CAD 450 million
He attributed the performance to transformation initiatives and “tight capital allocation discipline.” In Canada, Perron said Cogeco Communications delivered positive year-over-year adjusted EBITDA growth for a third consecutive quarter. He said the company continued to grow its customer base and was able to reduce some promotional intensity as market conditions became calmer. The company’s oxio digital business also continued to perform well, with Perron citing high customer satisfaction and referral rates.
Wireless sales were ahead of plan, Perron said, and the company is seeing a churn benefit when customers take both fixed and mobile services. He said that benefit is not yet visible in overall results because the wireless base remains small, but should become more meaningful as the business scales. U.S. business remains under pressure Management struck a more cautious tone on the U.S. business, where Cogeco operates under the Breezeline brand.