Cogeco Communications Inc.

Overview Key strengths Key risks Well distributed operational network across 13 U.S. states and two Canadian provinces Higher capital requirements for network expansion projects Strong EBITDA margins and cash flow generation enable the company to pursue both organic and M&A opportunities Increased leverage spurred by debt-funded acquisitions The entry into the Canadian mobile market through the MVNO model will lead to revenue growth in a mature market Softening demand, particularly in the U.S., for high-speed internet entry-level services due to reduced consumer spending and increasing competition With an increase in overbuilt footprints and a tougher competitive environment in the U.S. (fixed wireless and fiber-to-the-home [FTTH]), Cogeco Communications Inc.?s (Cogeco?s) WideOpenWest Inc. (WOW) integration was slower than expected. This led to

...Top-line growth and margins will slow in the next 12 months compared with fiscal 2022. With an increase in overbuilt footprints and a tougher competitive environment in the U.S. (fixed wireless and fiber-to-the-home [FTTH]), Cogeco Communications Inc.'s (Cogeco's) WideOpenWest Inc. (WOW) integration was slower than expected. This led to increased subscriber pressure and a 3.2% decline in internet subscribers in first-quarter 2023 compared with the same period a year earlier. However, on the Canadian side, we expect the competitive environment will be less intense, as network expansion projects offset competitors' fiber rollout strategies. In the...

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