We forecast Cogeco Communications Inc. to continue generating its S&P Global Ratings' strong adjusted EBITDA margins (see table 2 for adjustments) at about 46% for the next two years. Even though the company's Canadian brand segment experienced some margin compression in second-half 2018 due to IT migration issues, we view that as temporary and the segment should return to normalized margins by second-quarter fiscal 2019. Cogeco has been increasing its overall footprint in the provinces of Quebec and Ontario organically while expanding through acquisitions along the U.S. Eastern starboard. In the U.S., internet penetration is about 50% and video is at 38% at fiscal year-end 2019, which is significantly better than similar sized cable companies operating in the U.S. Penetration
