Cogeco 2007 Annual Report Download - page 36

Download and view the complete annual report

Please find page 36 of the 2007 Cogeco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 88

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88

34 COGECO CABLE INC. 2007 Management’s Discussion and Analysis
OPERATING COSTS
For fi scal 2007, Canadian operations’ operating costs, including network fees but excluding management fees payable to
COGECO Inc., rose by $65.9 million, or 19%. However, network fees increased by 17.9% during the same period mainly
attributable to the continuous rollout of the Telephony service in new areas and RGU growth. The increase of the other
operating costs is related to servicing additional RGUs, including the Telephony service.
OPERATING INCOME BEFORE AMORTIZATION
Fiscal 2007 operating income before amortization for the Canadian operations rose by $44.9 million, or 18.1%, compared
to fi scal 2006 as the growth in revenue outpaced the rise in operating costs. The operating margin for the Canadian
operations
remained essentially the same at 41% compared to 41.1% for fi scal 2006.
PORTUGUESE OPERATIONS
CUSTOMER STATISTICS
NET ADDITIONS % OF PENETRATION(1)
2007 2006(2) AUGUST 31
AUGUST 31, INITIAL
2007 ACTUAL GUIDANCE(3) ACTUAL 2007 2006
RGUs(4) 697,157 68,116 75,000 3,141 NA NA
BASIC CABLE SERVICE CUSTOMERS 294,003 24,309 25,000 1,117 NA NA
HSI SERVICE CUSTOMERS 160,023 23,745 25,000 1,165 54.4 50.5
TELEPHONY SERVICE CUSTOMERS 243,131 20,062 25,000 859 82.7 82.7
(1) AS A PERCENTAGE OF BASIC CABLE SERVICE CUSTOMERS IN AREAS SERVED.
(2) CUSTOMER ADDITIONS ARE FOR THE MONTH OF AUGUST 2006.
(3) ACCORDING TO THE FISCAL 2006 ANNUAL REPORT.
(4) REPRESENT THE SUM OF BASIC CABLE, HSI AND TELEPHONY SERVICE CUSTOMERS.
For fi scal 2007, all services generated customer growth as anticipated from the Corporation’s 2007 guidelines, except for
the Telephony service net additions, which were lower than expected, but the service penetration compared to Basic Cable
customers remained the same. Basic Cable service net additions grew by 24,309 customers, HSI service net additions by
23,745 customers and Telephony service net additions by 20,062 customers.
OPERATING RESULTS
YEARS ENDED AUGUST 31, 2007 2006(1)
(in thousands of dollars except percentages) $ $
REVENUE 224,810 16,866
OPERATING COSTS 146,957 11,895
OPERATING INCOME BEFORE AMORTIZATION 77,853 4,971
OPERATING MARGIN 34.6% 29.5%
(1) FINANCIAL RESULTS ARE FOR A 0NE-MONTH OPERATION.