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Cogeco Communications Releases its Financial Results for the Fourth Quarter of Fiscal 2024

01.11.2024 by admin

Strong progress on the strategic priorities announced last quarter centered on synergies, digitization, advanced analytics, network expansion and wireless.
Successfully completed the combination of our Canadian and U.S. telecommunications teams.
Signed strategic partnerships to enable an upcoming launch of wireless services in Canada, in a capital-efficient manner as an MVNO.
Met or exceeded all financial guidelines set for fiscal 2024; issuing fiscal 2025 financial guidelines.
Increasing quarterly eligible dividend by 8.0% to $0.922 per share.

MONTRÉAL, Oct. 31, 2024 /CNW/ – Today, Cogeco Communications Inc. CCA (“Cogeco Communications” or the “Corporation”) announced its financial results for the fourth quarter ended August 31, 2024 and is issuing its fiscal 2025 financial guidelines.

“Fiscal 2024 has been a year of tremendous progress for Cogeco,” said Frédéric Perron, President and CEO. “Over the last six months alone, we set clear priorities to achieve sustainable growth, launched wireless in the U.S., assembled the building blocks to launch wireless in Canada as an MVNO, successfully combined our Canadian and U.S. organizations and refreshed our executive team. The recently completed restructuring, which simplified our operating model, was the first phase of a structured three-year program. We are now in a position to accelerate our digital capabilities, drive bundling across wireline and wireless, and continue to optimize our operations for ongoing growth and value creation.

“Our Canadian telecommunications business continued to perform well in Q4, driven by growth of our Internet subscriber base through Cogeco Connexion, oxio, and our network expansion program. We’re particularly excited about our oxio brand’s performance as its digital model has not only become a growth engine for the organization, but has also become a model for key transformation initiatives within the Corporation more broadly.

“In the U.S., the launch of Breezeline Mobile provides customers even more compelling reasons to bundle their services with us. Our Internet-led strategy and focus on operational efficiency contributed to another quarter of strong margin growth.

“Over the past year, we have maintained our balanced approach to allocating capital to growth initiatives including network expansion, product improvements, and a capital-light approach to growing wireless services in both countries, as well as returning capital through an increased dividend and share buybacks, all while progressively reducing our leverage. We will continue with our balanced approach in fiscal 2025 and with that, we are delighted to announce an increase in our quarterly dividend per share to $0.922.”

Consolidated Financial Highlights

Three months ended August 31	2024	2023	⁽¹⁾	Change	Change in constant currency	⁽²⁾
(In thousands of Canadian dollars, except % and per share data) (unaudited)	$	$		%	%
Revenue	747,751	743,397		0.6	(0.7)
Adjusted EBITDA ⁽²⁾	370,418	351,300		5.4	4.2
Adjusted EBITDA margin ⁽²⁾	49.5 %	47.3 %
Profit for the period	85,484	91,797		(6.9)
Profit for the period attributable to owners of the Corporation	81,958	86,499		(5.2)
Adjusted profit attributable to owners of the Corporation ⁽²⁾⁽³⁾	99,054	97,175		1.9

Cash flows from operating activities	319,177	281,326		13.5
Free cash flow ⁽¹⁾⁽²⁾	148,189	88,953		66.6	66.1
Free cash flow, excluding network expansion projects ⁽¹⁾⁽²⁾	205,100	121,881		68.3	67.4

Acquisition of property, plant and equipment	154,260	205,570		(25.0)
Net capital expenditures ⁽²⁾⁽⁴⁾	152,253	176,617		(13.8)	(15.1)
Net capital expenditures, excluding network expansion projects ⁽²⁾	95,342	143,689		(33.6)	(34.8)

Capital intensity ⁽²⁾	20.4 %	23.8 %
Capital intensity, excluding network expansion projects ⁽²⁾	12.8 %	19.3 %

Diluted earnings per share	1.94	1.95		(0.5)
Adjusted diluted earnings per share ⁽²⁾⁽³⁾	2.35	2.19		7.3

Operating results

For the fourth quarter of fiscal 2024 ended on August 31, 2024:

Revenue increased by 0.6% to $747.8 million. On a constant currency basis⁽²⁾, revenue decreased by 0.7% due to a decline in revenue in the American telecommunications segment, offset in part by revenue growth in the Canadian telecommunications segment, as explained below.
- American telecommunications’ revenue decreased by 2.3% in constant currency (remained stable as reported), mainly due to a decline in its subscriber base, especially for entry-level services, and a higher proportion of customers subscribing to Internet-only services. The decline was offset in part by higher revenue per subscriber and a better product mix resulting from improving subscriber metrics.
- Canadian telecommunications’ revenue increased by 0.8%, mostly driven by the cumulative effect of high-speed Internet service additions over the past year, including from network expansion projects, as well as the Niagara Regional Broadband Network acquisition completed on February 5, 2024.
Adjusted EBITDA increased by 5.4% to $370.4 million. On a constant currency basis, adjusted EBITDA increased by 4.2%, mainly due to higher adjusted EBITDA in both the Canadian and American telecommunications segments, driven by cost reduction initiatives and operating efficiencies across the Corporation as a result of our ongoing transformation program, in addition to revenue growth in the Canadian telecommunications segment.
- Canadian telecommunications adjusted EBITDA increased by 3.8%, or 4.0% in constant currency.
- American telecommunications adjusted EBITDA increased by 5.2%, or 2.4% in constant currency.
Profit for the period amounted to $85.5 million, of which $82.0 million, or $1.94 per diluted share, was attributable to owners of the Corporation compared to $91.8 million, $86.5 million, and $1.95 per diluted share, respectively, in the comparable period of fiscal 2023. The decreases in profit for the period and profit attributable to owners of the Corporation resulted mainly from higher depreciation and amortization expense and non-cash pre-tax impairment charges of $14.9 million recognized during the quarter mostly in relation to strategic partnerships to facilitate the development of wireless services in Canada under a capital-light operating model, partly offset by higher adjusted EBITDA, lower financial expense and lower acquisition, integration, restructuring and other costs.
- Adjusted profit attributable to owners of the Corporation⁽³⁾ was $99.1 million, or $2.35 per diluted share⁽³⁾, compared to $97.2 million, or $2.19 per diluted share, last year. The increase of adjusted diluted earnings per share over last year reflects the benefit of the Corporation’s share buybacks.
Net capital expenditures were $152.3 million, a decrease of 13.8% compared to $176.6 million in the same period of the prior year. In constant currency, net capital expenditures⁽²⁾ were $150.0 million, a decrease of 15.1% compared to last year, mainly resulting from lower spending due to the timing of network expansion projects in both the American and Canadian telecommunications segments, in addition to drawdowns of previously accumulated customer premise equipment inventory in the American telecommunications segment.
- Excluding network expansion projects, net capital expenditures were $95.3 million, a decrease of 33.6% compared to $143.7 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects⁽²⁾ were $93.7 million, a decrease of 34.8% compared to last year.
- Fibre-to-the-home network expansion projects continued in both Canada and the United States by adding close to 58,000⁽⁵⁾homes passed during fiscal 2024, of which close to 14,000⁽⁵⁾were in the fourth quarter.
- Capital intensity was 20.4% compared to 23.8% last year. Excluding network expansion projects, capital intensity was 12.8% compared to 19.3% in the same period of the prior year.
Acquisition of property, plant and equipment decreased by 25.0% to $154.3 million, mainly resulting from lower spending.
Free cash flow⁽¹⁾ increased by 66.6%, or 66.1% in constant currency, and amounted to $148.2 million, or $147.7 million in constant currency, mainly due to lower net capital expenditures, higher adjusted EBITDA and lower financial expense. Free cash flow, excluding network expansion projects⁽¹⁾ increased by 68.3%, or 67.4% in constant currency, and amounted to $205.1 million, or $204.1 million in constant currency.
Cash flows from operating activities increased by 13.5% to $319.2 million, mainly from the timing of payments of trade and other payables and higher adjusted EBITDA.
At its October 31, 2024 meeting, the Board of Directors of Cogeco Communications declared a quarterly eligible dividend of $0.922 per share, an increase of 8.0% compared to $0.854 per share last year.

FISCAL 2025 FINANCIAL GUIDELINES

Cogeco Communications released its fiscal 2025 financial guidelines. Fiscal 2025 will be the first year of a three-year transformation program, where investments are made in order to set the Corporation on a path to sustainable growth. On a constant currency basis, the Corporation expects fiscal 2025 revenue to remain stable resulting from a combination of Internet subscriber growth and a decline in video and wireline phone subscriptions. On a constant currency basis, fiscal 2025 adjusted EBITDA is anticipated to remain stable, mainly due to stable revenue as well as stable operating expenses, which are anticipated to benefit from the recent corporate reorganization and other operational improvements, offset by investments into new capabilities as part of a three-year transformation program. Net capital expenditures are anticipated to be between $650 and $725 million, including net investments of approximately $140 to $190 million in growth-oriented network expansions, which will increase the Corporation’s footprint in Canada and the United States. Capital intensity is expected to range between 22% and 24%, or 17% and 19% excluding network expansion projects. Free cash flow and free cash flow, excluding network expansion projects, are expected to decrease between 0% and 10% due to stronger than anticipated free cash flow in fiscal 2024, continued growth-oriented investments, and higher financial expense and current income tax.


	October 31, 2024
	Projections	⁽ⁱ⁾	Actual
	Fiscal 2025 (constant currency)	⁽ⁱⁱ⁾	Fiscal 2024
(In millions of Canadian dollars, except percentages)	$		$

Financial guidelines
Revenue	Stable		2,977
Adjusted EBITDA	Stable		1,442
Net capital expenditures	$650 to $725		638
Net capital expenditures in connection with network expansion projects	$140 to $190		137
Capital intensity	22% to 24%		21.4 %
Capital intensity, excluding network expansion projects	17% to 19%		16.8 %
Free cash flow	Decrease of 0% to 10%	⁽ⁱⁱⁱ⁾	476
Free cash flow, excluding network expansion projects	Decrease of 0% to 10%	⁽ⁱⁱⁱ⁾	613

(i)	Percentage of changes compared to fiscal 2024.
(ii)	Fiscal 2025 financial guidelines are based on a USD/CDN constant exchange rate of 1.3606 USD/CDN.
(iii)	The assumed current income tax effective rate is approximately 14%.

These financial guidelines, including the various assumptions underlying them, contain forward-looking statements concerning the business outlook for Cogeco Communications, and should be read in conjunction with the “Forward-looking statements” section of this press release.

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation. For further details, please refer to the “Non-IFRS Accounting Standards and other financial measures” section of this press release.
(2)	Adjusted EBITDA and net capital expenditures are total of segments measures. Adjusted EBITDA margin and capital intensity are supplementary financial measures. Constant currency basis, adjusted profit attributable to owners of the Corporation, net capital expenditures, excluding network expansion projects, free cash flow and free cash flow, excluding network expansion projects are non-IFRS Accounting Standards measures. Change in constant currency, capital intensity, excluding network expansion projects and adjusted diluted earnings per share are non-IFRS Accounting Standards ratios. These indicated terms do not have standardized definitions prescribed by IFRS^® Accounting Standards, as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) and therefore, may not be comparable to similar measures presented by other companies. For more information on these financial measures, please consult the “Non-IFRS Accounting Standards and other financial measures” section of this press release.
(3)	Excludes the impact of non-cash impairment charges, and acquisition, integration, restructuring and other costs, net of tax and non-controlling interest.
(4)	Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance.
(5)	Organic growth calculated by excluding additions resulting from acquisitions.

Financial highlights

					Change in constant currency						Change in constant currency
Three months and years ended August 31	2024	2023	⁽¹⁾	Change	Change in constant currency	^{(2) (3)}	2024	2023	⁽¹⁾	Change	Change in constant currency	^{(2) (3)}
(In thousands of Canadian dollars, except % and per share data)	$	$		%	%		$	$		%	%
Operations
Revenue	747,751	743,397		0.6	(0.7)		2,976,524	2,984,128		(0.3)	(0.8)
Adjusted EBITDA ⁽³⁾	370,418	351,300		5.4	4.2		1,442,314	1,421,066		1.5	1.0
Adjusted EBITDA margin ⁽³⁾	49.5 %	47.3 %					48.5 %	47.6 %
Acquisition, integration, restructuring and other costs ⁽⁴⁾	10,561	15,228		(30.6)			59,731	36,225		64.9
Impairment of property, plant and equipment	14,862	—		—			14,862	—		—
Profit for the period	85,484	91,797		(6.9)			354,132	417,972		(15.3)
Profit for the period attributable to owners of the Corporation	81,958	86,499		(5.2)			335,534	392,273		(14.5)
Adjusted profit attributable to owners of the Corporation⁽³⁾⁽⁵⁾	99,054	97,175		1.9			400,431	417,960		(4.2)
Cash flow
Cash flows from operating activities	319,177	281,326		13.5			1,175,219	962,905		22.0
Free cash flow ⁽¹⁾⁽³⁾	148,189	88,953		66.6	66.1		476,021	418,056		13.9	13.6
Free cash flow, excluding network expansion projects ⁽¹⁾⁽³⁾	205,100	121,881		68.3	67.4		613,415	590,891		3.8	3.5
Acquisition of property, plant and equipment	154,260	205,570		(25.0)			659,090	802,830		(17.9)
Net capital expenditures⁽³⁾⁽⁶⁾	152,253	176,617		(13.8)	(15.1)		637,833	699,506		(8.8)	(9.3)
Net capital expenditures, excluding network expansion projects ⁽³⁾	95,342	143,689		(33.6)	(34.8)		500,439	526,671		(5.0)	(5.5)
Capital intensity ⁽³⁾	20.4 %	23.8 %					21.4 %	23.4 %
Capital intensity, excluding network expansion projects ⁽³⁾	12.8 %	19.3 %					16.8 %	17.6 %
Per share data ⁽⁷⁾
Earnings per share
Basic	1.95	1.95		—			7.87	8.78		(10.4)
Diluted	1.94	1.95		(0.5)			7.83	8.75		(10.5)
Adjusted diluted ⁽³⁾⁽⁵⁾	2.35	2.19		7.3			9.35	9.32		0.3
Dividends per share	0.854	0.776		10.1			3.416	3.104		10.1

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Proceeds on disposals of property, plant and equipment amounted to $0.6 million and $3.4 million for the three-month period and year ended August 31, 2024, respectively ($1.0 million and $2.7 million, respectively, in fiscal 2023). Comparative figures were restated to conform to the current presentation. For further details, please refer to the “Non-IFRS Accounting Standards and other financial measures” section of this press release.
(2)	Key performance indicators presented on a constant currency basis are obtained by translating financial results from the current periods denominated in US dollars at the foreign exchange rate of the comparable periods of the prior year. For the three-month period and year ended August 31, 2023, the average foreign exchange rates used for translation were 1.3329 USD/CDN and 1.3467 USD/CDN, respectively.
(3)	Adjusted EBITDA and net capital expenditures are total of segments measures. Adjusted EBITDA margin and capital intensity are supplementary financial measures. Adjusted profit attributable to owners of the Corporation, free cash flow, free cash flow, excluding network expansion projects and net capital expenditures, excluding network expansion projects are non-IFRS Accounting Standards measures. Change in constant currency, capital intensity, excluding network expansion projects and adjusted diluted earnings per share are non-IFRS Accounting Standards ratios. These indicated terms do not have standardized definitions prescribed by IFRS Accounting Standards and therefore, may not be comparable to similar measures presented by other companies. For more information on these financial measures, please consult the “Non-IFRS Accounting Standards and other financial measures” section of this press release.
(4)	For the three-month period and year ended August 31, 2024, acquisition, integration, restructuring and other costs were mostly related to restructuring costs recognized during the second half of the year, including costs related to the new organizational structure announced in May 2024 and other cost optimization initiatives. For the three-month period and year ended August 31, 2023, acquisition, integration, restructuring and other costs resulted mostly from costs related to the integration of past acquisitions, as well as acquisition and integration costs incurred in connection with the acquisition of oxio, completed on March 3, 2023, from restructuring costs associated with organizational changes during the fourth quarter of fiscal 2023 within the Canadian and the American telecommunications segments and from configuration and customization costs related to cloud computing arrangements. Furthermore, a retroactive adjustment of $8.4 million was recognized in fiscal 2023 following the Copyright Board preliminary conclusions on the redetermination of the 2014-2018 royalty rates, of which $4.2 million was reversed during the second quarter of fiscal 2024 following the Copyright Board decision issued in January 2024.
(5)	Excludes the impact of non-cash impairment charges, acquisition, integration, restructuring and other costs, and gains/losses on debt modification and/or extinguishment, all net of tax and non-controlling interest.
(6)	Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance.
(7)	Per multiple and subordinate voting share.


As at	August 31, 2024	August 31, 2023
(In thousands of Canadian dollars, except %)	$	$
Financial condition
Cash and cash equivalents	76,335	362,921
Total assets	9,675,009	9,768,370
Long-term debt
Current	361,808	41,765
Non-current	4,448,261	4,979,241
Net indebtedness ⁽¹⁾	4,803,629	4,749,214
Equity attributable to owners of the Corporation	2,979,691	2,957,797
Return on equity ⁽²⁾	11.3 %	13.7 %

(1)	Net indebtedness is a capital management measure. For more information on this financial measure, please consult the “Non-IFRS Accounting Standards and other financial measures” section of the Corporation’s MD&A for the year ended August 31, 2024, available on SEDAR+ at www.sedarplus.ca.
(2)	Return on equity is a supplementary financial measure and is calculated as profit attributable to owners of the Corporation for the year divided by the average of the equity attributable to owners of the Corporation for the year.

Forward-looking statements

Certain statements contained in this press release may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Cogeco Communications Inc.’s (“Cogeco Communications” or the “Corporation”) future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as “may”; “will”; “should”; “expect”; “plan”; “anticipate”; “believe”; “intend”; “estimate”; “predict”; “potential”; “continue”; “foresee”, “ensure” or other similar expressions concerning matters that are not historical facts. Particularly, statements relating to the Corporation’s financial guidelines, future operating results and economic performance, objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, purchase price allocation, tax rates, weighted average cost of capital, performance and business prospects and opportunities, which Cogeco Communications believes are reasonable as of the current date. Refer in particular to the “Corporate objectives and strategy” and “Fiscal 2025 financial guidelines” sections of the Corporation’s Fiscal 2024 annual Management’s Discussion and Analysis (“MD&A”) for a discussion of certain key economic, market and operational assumptions we have made in preparing forward-looking statements. While management considers these assumptions to be reasonable based on information currently available to the Corporation, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what Cogeco Communications currently expects. These factors include risks such as general market conditions, competitive risks (including changing competitive and technology ecosystems and disruptive competitive strategies adopted by our competitors), business risks, regulatory risks, tax risks, technology risks (including cybersecurity), financial risks (including variations in currency and interest rates), economic conditions (including inflation pressuring revenue, reduced consumer spending and increasing costs), talent management risks (including the highly competitive market for a limited pool of digitally skilled employees), human-caused and natural threats to the Corporation’s network (including increased frequency of extreme weather events with the potential to disrupt operations), infrastructure and systems, sustainability and sustainability reporting risks, ethical behavior risks, ownership risks, litigation risks and public health and safety, many of which are beyond the Corporation’s control. For more exhaustive information on these risks and uncertainties, the reader should refer to the “Uncertainties and main risk factors” section of the Corporation’s Fiscal 2024 annual MD&A. These factors are not intended to represent a complete list of the factors that could affect Cogeco Communications and future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forward-looking information contained in this press release and the forward-looking statements contained in this press release represent Cogeco Communications’ expectations as of the date of this press release (or as of the date they are otherwise stated to be made) and are subject to change after such date. While management may elect to do so, the Corporation is under no obligation (and expressly disclaims any such obligation) and does not undertake to update or alter this information at any particular time, whether as a result of new information, future events or otherwise, except as required by law.

All amounts are stated in Canadian dollars unless otherwise indicated. This press release should be read in conjunction with the MD&A included in the Corporation’s Fiscal 2024 Annual Report, the Corporation’s consolidated financial statements and the notes thereto prepared in accordance with IFRS^® Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) for the year ended August 31, 2024.

Non-IFRS Accounting Standards and other financial measures

This press release includes references to non-IFRS Accounting Standards and other financial measures used by Cogeco Communications. These financial measures are reviewed in assessing the performance of Cogeco Communications and used in the decision-making process with regard to its business units.

Reconciliations between non-IFRS Accounting Standards and other financial measures to the most directly comparable IFRS Accounting Standards measures are provided below. Certain additional disclosures for non-IFRS Accounting Standards and other financial measures used in this press release have been incorporated by reference and can be found in the “Non-IFRS Accounting Standards and other financial measures” section of the Corporation’s MD&A for the year ended August 31, 2024, available on SEDAR+ at www.sedarplus.ca. The following non-IFRS Accounting Standards measures are used as a component of Cogeco Communications’ non-IFRS Accounting Standards ratios.


Specified non-IFRS Accounting Standards measures	Used in the component of the following non-IFRS Accounting Standards ratios
Adjusted profit attributable to owners of the Corporation	Adjusted diluted earnings per share
Constant currency basis	Change in constant currency
Net capital expenditures, excluding network expansion projects	Capital intensity, excluding network expansion projects

Financial measures presented on a constant currency basis for the three-month period and year ended August 31, 2024 are translated at the average foreign exchange rate of the comparable periods of the prior year, which were 1.3329 USD/CDN and 1.3467 USD/CDN, respectively.

Constant currency basis and foreign exchange impact reconciliation

Consolidated

Three months ended August 31

2024

2023

⁽¹⁾

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

747,751

(9,731)

738,020

743,397

0.6

(0.7)

Operating expenses

372,095

(5,234)

366,861

388,381

(4.2)

(5.5)

Management fees – Cogeco Inc.

5,238

—

5,238

3,716

41.0

Adjusted EBITDA

370,418

(4,497)

365,921

351,300

5.4

4.2

Free cash flow⁽¹⁾

148,189

(462)

147,727

88,953

66.6

66.1

Net capital expenditures

152,253

(2,254)

149,999

176,617

(13.8)

(15.1)

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its free cash flow calculation to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.

Years ended August 31

2024

2023

⁽¹⁾

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign exchange impact

constant currency

Actual

Actual

constant currency

Revenue

2,976,524

(15,024)

2,961,500

2,984,128

(0.3)

(0.8)

Operating expenses

1,513,258

(8,121)

1,505,137

1,544,462

(2.0)

(2.5)

Management fees – Cogeco Inc.

20,952

—

20,952

18,600

12.6

Adjusted EBITDA

1,442,314

(6,903)

1,435,411

1,421,066

1.5

1.0

Free cash flow⁽¹⁾

476,021

(932)

475,089

418,056

13.9

13.6

Net capital expenditures

637,833

(3,340)

634,493

699,506

(8.8)

(9.3)

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its free cash flow calculation to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.

Canadian telecommunications segment

Three months ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

378,702

—

378,702

375,754

0.8

Operating expenses

175,688

(288)

175,400

180,183

(2.5)

(2.7)

Adjusted EBITDA

203,014

288

203,302

195,571

3.8

4.0

Net capital expenditures

71,000

(245)

70,755

73,348

(3.2)

(3.5)

Years ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

1,510,506

—

1,510,506

1,489,915

1.4

Operating expenses

710,706

(447)

710,259

701,717

1.3

1.2

Adjusted EBITDA

799,800

447

800,247

788,198

1.5

Net capital expenditures

356,274

(463)

355,811

354,384

0.5

0.4

American telecommunications segment

Three months ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

369,049

(9,731)

359,318

367,643

0.4

(2.3)

Operating expenses

185,588

(4,916)

180,672

193,172

(3.9)

(6.5)

Adjusted EBITDA

183,461

(4,815)

178,646

174,471

5.2

2.4

Net capital expenditures

76,238

(2,011)

74,227

100,488

(24.1)

(26.1)

Years ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

1,466,018

(15,024)

1,450,994

1,494,213

(1.9)

(2.9)

Operating expenses

759,658

(7,632)

752,026

800,409

(5.1)

(6.0)

Adjusted EBITDA

706,360

(7,392)

698,968

693,804

1.8

0.7

Net capital expenditures

267,728

(2,865)

264,863

336,910

(20.5)

(21.4)

Adjusted profit attributable to owners of the Corporation


	Three months ended August 31		Years ended August 31
	2024	2023	2024	2023
(In thousands of Canadian dollars)	$	$	$	$
Profit for the period attributable to owners of the Corporation	81,958	86,499	335,534	392,273
Impairment of property, plant and equipment	14,862	—	14,862	—
Acquisition, integration, restructuring and other costs	10,561	15,228	59,731	36,225
Loss on debt extinguishment ⁽¹⁾	—	—	16,880	—
Tax impact for the above items	(6,648)	(3,829)	(24,109)	(9,370)
Non-controlling interest impact for the above items	(1,679)	(723)	(2,467)	(1,168)
Adjusted profit attributable to owners of the Corporation	99,054	97,175	400,431	417,960

(1) Included within financial expense.

Free cash flow and free cash flow, excluding network expansion projects reconciliations


	Three months ended August 31			Years ended August 31
	2024	2023	⁽¹⁾	2024	2023	⁽¹⁾
(In thousands of Canadian dollars)	$	$		$	$
Cash flows from operating activities	319,177	281,326		1,175,219	962,905
Changes in other non-cash operating activities	(34,878)	(9,946)		(56,369)	97,851
Income taxes paid	6,526	2,025		5,719	91,673
Current income taxes	(553)	(5,708)		(20,147)	(32,067)
Interest paid	71,695	65,489		266,464	239,648
Financial expense	(61,925)	(70,222)		(277,690)	(251,642)
Loss on debt extinguishment⁽²⁾	—	—		16,880	—
Amortization of deferred transaction costs and discounts on long-term debt ⁽²⁾	2,190	3,195		9,143	12,601
Net capital expenditures⁽³⁾	(152,253)	(176,617)		(637,833)	(699,506)
Proceeds on disposals of property, plant and equipment ⁽¹⁾	594	1,037		3,378	2,651
Repayment of lease liabilities	(2,384)	(1,626)		(8,743)	(6,058)
Free cash flow⁽¹⁾	148,189	88,953		476,021	418,056
Net capital expenditures in connection with network expansion projects	56,911	32,928		137,394	172,835
Free cash flow, excluding network expansion projects⁽¹⁾	205,100	121,881		613,415	590,891

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.
(2)	Included within financial expense.
(3)	Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance.

Net capital expenditures reconciliation


	Three months ended August 31		Years ended August 31
	2024	2023	2024	2023
(In thousands of Canadian dollars)	$	$	$	$
Acquisition of property, plant and equipment	154,260	205,570	659,090	802,830
Subsidies received in advance recognized as a reduction of the cost of property, plant and equipment during the period	(2,007)	(28,953)	(21,257)	(103,324)
Net capital expenditures	152,253	176,617	637,833	699,506

Adjusted EBITDA reconciliation


	Three months ended August 31		Years ended August 31
	2024	2023	2024	2023
(In thousands of Canadian dollars)	$	$	$	$
Profit for the period	85,484	91,797	354,132	417,972
Income taxes	15,225	18,119	62,342	94,761
Financial expense	61,925	70,222	277,690	251,642
Impairment of property, plant and equipment	14,862	—	14,862	—
Depreciation and amortization	182,361	155,934	673,557	620,466
Acquisition, integration, restructuring and other costs	10,561	15,228	59,731	36,225
Adjusted EBITDA	370,418	351,300	1,442,314	1,421,066

Net capital expenditures and free cash flow excluding network expansion projects reconciliations

Net capital expenditures


Three months ended August 31	2024			2023		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual	Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$	%	%
Net capital expenditures	152,253	(2,254)	149,999	176,617	(13.8)	(15.1)
Net capital expenditures in connection with network expansion projects	56,911	(576)	56,335	32,928	72.8	71.1
Net capital expenditures, excluding network expansion projects	95,342	(1,678)	93,664	143,689	(33.6)	(34.8)


Years ended August 31	2024			2023		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual	Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$	%	%
Net capital expenditures	637,833	(3,340)	634,493	699,506	(8.8)	(9.3)
Net capital expenditures in connection with network expansion projects	137,394	(780)	136,614	172,835	(20.5)	(21.0)
Net capital expenditures, excluding network expansion projects	500,439	(2,560)	497,879	526,671	(5.0)	(5.5)

Free cash flow


Three months ended August 31	2024			2023	⁽¹⁾		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual		Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$		%	%
Free cash flow⁽¹⁾	148,189	(462)	147,727	88,953		66.6	66.1
Net capital expenditures in connection with network expansion projects	56,911	(576)	56,335	32,928		72.8	71.1
Free cash flow, excluding network expansion projects⁽¹⁾	205,100	(1,038)	204,062	121,881		68.3	67.4

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.


Years ended August 31	2024			2023	⁽¹⁾		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual		Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$		%	%
Free cash flow⁽¹⁾	476,021	(932)	475,089	418,056		13.9	13.6
Net capital expenditures in connection with network expansion projects	137,394	(780)	136,614	172,835		(20.5)	(21.0)
Free cash flow, excluding network expansion projects⁽¹⁾	613,415	(1,712)	611,703	590,891		3.8	3.5

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.

Additional information

Additional information relating to the Corporation, including its Annual Information Form, is available on SEDAR+ at www.sedarplus.ca and on the Corporation’s website at corpo.cogeco.com.

About Cogeco Communications Inc.

Cogeco Communications Inc. is a leading telecommunications provider committed to bringing people together through powerful communications and entertainment experiences. We provide world-class Internet, video and wireline phone services to 1.6 million residential and business subscribers in Canada and thirteen states in the United States. We also offer wireless services in most of our U.S. operating territory. Our services are marketed under the Cogeco and oxio brands in Canada, and under the Breezeline brand in the U.S. We take pride in our strong presence in the communities we serve and in our commitment to a sustainable future. Cogeco Communications Inc.’s subordinate voting shares are listed on the Toronto Stock Exchange CCA.

For information:

Investors
Troy Crandall
Head, Investor Relations
Cogeco Communications Inc.
Tel.: 514 764-4600
troy.crandall@cogeco.com

Media
Claudja Joseph
Director, Communications & DEI
Cogeco Communications Inc.
Tel.: 514 764-4600
claudja.joseph@cogeco.com

Conference Call:	Friday, November 1^st, 2024 at 11:00 a.m. (Eastern Daylight Time)

	A live audio of the analyst conference call will be available on both the Investor Relations and the Events and Presentations pages on Cogeco Communications’ website. Financial analysts will be able to access the live conference call and ask questions. Media representatives may attend as listeners only. A recording of the conference call will be available on Cogeco Communications’ website for a three-month period.

	Please use the following dial-in number to access the conference call 10 minutes before the start of the conference:

	Local – Toronto: 1 289 514-5100
	Toll Free – North America: 1 800 717-1738
	To join this conference call, participants are required to provide the operator with the name of the company hosting the call, that is, Cogeco Inc. or Cogeco Communications Inc.

SOURCE Cogeco Communications Inc.

View original content: http://www.newswire.ca/en/releases/archive/October2024/31/c6932.html

Lastest news News

Tesla Can Make Cybercab For The Same Money It Takes Waymo To Install Lidar Sensors On Its Robotaxi, Says Ark Analyst

01.11.2024 by admin

Tesla Inc.’s TSLA cost of making the entire Cybercab will roughly equal Alphabet Inc. GOOG GOOGL subsidiary Waymo‘s cost for installing lidar sensors on its robotaxis, according to Ark Invest analyst Brett Winton.

What Happened: The cost of manufacturing the Tesla Cybercab should be half the cost of manufacturing the company’s Model 3 or Model Y given the Cybercab has half the content as the other vehicles, Winton said. So once production reaches scale, the cost of manufacturing a Cybercab should be nearly $18,000, according to the analyst.

The cost of purchasing Waymo’s lidar sensors together with installation charges will cost roughly the same amount, Winton said. While the cost of the lidars alone would come at $13,500, installation and wiring will cost another $1,500, taking the total cost of the lidar sensors alone to $15,000.

Waymo installs its sensor suite on electric vehicles made by auto manufacturers such as Zeekr, implying a separate cost for purchasing the vehicle.

tophat lidar at $7.5k, on-body lidars at $2k * 3. Call it $1.5k to install the parts and wiring: $15k

cybercab at ~half the content of the average model 3/y should be ~half as expensive to manufacture, scaled. Suggests $18k.

— Brett Winton (@wintonARK) October 31, 2024

Winton is not alone in expecting the cost of making the Cybercab to be lower than Waymo’s cost for deploying its robotaxis.

“ARK estimates that Waymo’s vehicles cost more than $100,000 to produce, its sensor set alone ~$40,000+, though it is working to reduce costs. Tesla’s Model 3 costs $40,000, sensors included. While it needs to build backend support for remote vehicle assistance and customer support, Tesla should be able to leverage its existing factory, charging, and service infrastructure to scale efficiently,” Ark Invest’s Tasha Keeney also said in a blog post last month.

Why It Matters: Tesla unveiled its Cybercab with no pedals or steering wheel last month. The vehicle, CEO Elon Musk then said, will enter production “before 2027” and be priced below $30,000.

During Tesla’s third-quarter earnings call last month, Musk said that the company expects to start a ride-hail service in Texas and California starting next year, subject to regulatory approval, with self-driving Model 3 and Model Y vehicles.

However, the vehicles might not all operate as driverless robotaxis initially but with a driver as some states demand it until the company touches certain milestones in terms of miles and hours driven, the company then said.

However, Musk also expressed confidence about the company operating driverless paid rides sometime next year, placing it as a firm competitor to Alphabet Inc’s Waymo.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

Read Next:

Photos courtesy: Tesla and Shutterstock

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News Real estate

Commercial Real Estate Foreclosures Soar By 48% Nationwide While California Sees A 238% Surge

01.11.2024 by admin

Commercial real estate foreclosures are surging across the U.S., with foreclosures climbing 48% in September year-over-year. California’s numbers are especially striking, with a massive 238% increase, per ATTOM’s recent report, as detailed by Business Insider. This spike points to growing pressures in the sector. This trend is likely influenced by rising interest rates and lingering effects from post-pandemic shifts in demand, particularly for office spaces. States like New York and Florida are also seeing big foreclosure increases, up 48% and 49%, respectively.

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The broader economic shifts are weighing heavily on commercial real estate. Debt continues to mature while demand remains weak. Office spaces have been hit particularly hard as businesses adapt to hybrid work models. Many are downsizing or shedding traditional office space. This transformation leaves landlords with vacancies they may struggle to fill. The dynamic, combined with stricter lending terms, is creating a perfect storm of financial stress for property owners. It could explain the rise in foreclosures.

Industry experts, as polled by Business Insider, are divided on the outlook. Some see foreclosures continuing to rise, especially in markets where properties are difficult to repurpose or reposition. Many commercial properties — particularly aging office buildings — require substantial investment to be converted into housing or mixed-use spaces. These projects are often too costly for landlords already struggling with mortgage payments and other operating expenses.

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However, a recent report from Moody’s offers a more optimistic view, noting an uptick in commercial property transactions in September, the first rise in two years. This increase suggests that, while distressed sales may be on the horizon, there could also be buyers looking to snap up properties at lower prices, potentially spurring a market rebound.

Mortgage delinquency rates further underscore the stress in the sector. The Mortgage Bankers Association recently reported that loans overdue by 60 to 90 days have risen to 0.3%, with loans over 90 days past due up to 2.7%. Despite this strain, some property experts remain cautiously optimistic, suggesting that creative solutions, like converting office spaces into housing, could alleviate commercial real estate distress and the housing shortage.

For now, all eyes remain on how landlords, policymakers, and investors respond to the ongoing pressures facing commercial real estate, as any major moves could impact urban development and housing availability across the U.S.

source

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Earnings News

Cogeco Releases its Financial Results for the Fourth Quarter of Fiscal 2024

01.11.2024 by admin

Strong progress on the strategic priorities announced last quarter centered on synergies, digitization, advanced analytics, network expansion and wireless, as well as transforming our radio business.
Successfully completed the combination of our Canadian and U.S. telecommunications teams.
Signed strategic partnerships to enable an upcoming launch of wireless services in Canada, in a capital-efficient manner as an MVNO.
Met or exceeded all financial guidelines set for fiscal 2024; issuing fiscal 2025 financial guidelines.
Increasing quarterly eligible dividend by 8.0% to $0.922 per share.

MONTRÉAL, Oct. 31, 2024 /CNW/ – Today, Cogeco Inc. CGO (“Cogeco” or the “Corporation”) announced its financial results for the fourth quarter ended August 31, 2024 and is issuing its fiscal 2025 financial guidelines.

“While competitive dynamics in the radio advertising market remain challenging, many of Cogeco Media’s radio stations remained high in the ratings again this quarter. Furthermore, our digital advertising solutions continue to provide a growing contribution to our overall revenue.

Consolidated Financial Highlights

Three months ended August 31	2024	2023	⁽¹⁾	Change	Change in constant currency	⁽²⁾
(In thousands of Canadian dollars, except % and per share data) (unaudited)	$	$		%	%
Revenue	768,656	766,652		0.3	(1.0)
Adjusted EBITDA ⁽²⁾	371,216	351,925		5.5	4.2
Profit for the period	81,437	90,521		(10.0)
Profit for the period attributable to owners of the Corporation	19,248	29,234		(34.2)
Adjusted profit attributable to owners of the Corporation ⁽²⁾⁽³⁾	25,562	33,006		(22.6)

Cash flows from operating activities	326,723	284,370		14.9
Free cash flow ⁽¹⁾⁽²⁾	143,055	87,274		63.9	63.4
Free cash flow, excluding network expansion projects ⁽¹⁾⁽²⁾	199,966	120,202		66.4	65.5

Acquisition of property, plant and equipment	156,577	207,434		(24.5)
Net capital expenditures ⁽²⁾⁽⁴⁾	154,570	178,481		(13.4)	(14.7)
Net capital expenditures, excluding network expansion projects ⁽²⁾	97,659	145,553		(32.9)	(34.1)

Diluted earnings per share	1.99	1.87		6.4
Adjusted diluted earnings per share ⁽²⁾⁽³⁾	2.65	2.12		25.0

Operating results

For the fourth quarter of fiscal 2024 ended on August 31, 2024:

Revenue remained stable at $768.7 million. On a constant currency basis⁽²⁾, revenue decreased by 1.0% due to a decline in revenue in the American telecommunications segment and in the media activities, offset in part by revenue growth in the Canadian telecommunications segment, as explained below.
- American telecommunications’ revenue decreased by 2.3% in constant currency (remained stable as reported), mainly due to a decline in its subscriber base, especially for entry-level services, and a higher proportion of customers subscribing to Internet-only services. The decline was offset in part by higher revenue per subscriber and a better product mix resulting from improving subscriber metrics.
- Revenue in the media activities decreased by 10.1% as competitive dynamics in the radio advertising market remain challenging.
- Canadian telecommunications’ revenue increased by 0.8%, mostly driven by the cumulative effect of high-speed Internet service additions over the past year, including from network expansion projects, as well as the Niagara Regional Broadband Network acquisition completed on February 5, 2024.
Adjusted EBITDA increased by 5.5% to $371.2 million. On a constant currency basis, adjusted EBITDA increased by 4.2%, mainly due to higher adjusted EBITDA in both the Canadian and American telecommunications segments, driven by cost reduction initiatives and operating efficiencies across the Corporation as a result of our ongoing transformation program, in addition to revenue growth in the Canadian telecommunications segment.
- Canadian telecommunications adjusted EBITDA increased by 3.8%, or 4.0% in constant currency.
- American telecommunications adjusted EBITDA increased by 5.2%, or 2.4% in constant currency.
Profit for the period amounted to $81.4 million, of which $19.2 million, or $1.99 per diluted share, was attributable to owners of the Corporation compared to $90.5 million, $29.2 million, and $1.87 per diluted share, respectively, in the comparable period of fiscal 2023. The decreases in profit for the period and profit attributable to owners of the Corporation resulted mainly from higher depreciation and amortization expense and non-cash pre-tax impairment charges of $15.2 million recognized during the quarter mostly in relation to strategic partnerships to facilitate the development of wireless services in Canada under a capital-light operating model, partly offset by higher adjusted EBITDA and lower financial expense.
- Adjusted profit attributable to owners of the Corporation⁽³⁾ was $25.6 million, or $2.65 per diluted share⁽³⁾, compared to $33.0 million, or $2.12 per diluted share, last year. The increase of adjusted diluted earnings per share over last year reflects the benefit of the Corporation’s share buybacks.
Net capital expenditures were $154.6 million, a decrease of 13.4% compared to $178.5 million in the same period of the prior year. In constant currency, net capital expenditures⁽²⁾ were $152.3 million, a decrease of 14.7% compared to last year, mainly resulting from lower spending due to the timing of network expansion projects in both the American and Canadian telecommunications segments, in addition to drawdowns of previously accumulated customer premise equipment inventory in the American telecommunications segment.
- Excluding network expansion projects, net capital expenditures were $97.7 million, a decrease of 32.9% compared to $145.6 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects⁽²⁾were $96.0 million, a decrease of 34.1% compared to last year.
- Fibre-to-the-home network expansion projects continued in both Canada and the United States by adding close to 58,000⁽⁵⁾homes passed during fiscal 2024, of which close to 14,000⁽⁵⁾were in the fourth quarter.
Acquisition of property, plant and equipment decreased by 24.5% to $156.6 million, mainly resulting from lower spending.
Free cash flow⁽¹⁾ increased by 63.9%, or 63.4% in constant currency, and amounted to $143.1 million, or $142.6 million in constant currency, mainly due to lower net capital expenditures, higher adjusted EBITDA and lower financial expense. Free cash flow, excluding network expansion projects⁽¹⁾ increased by 66.4%, or 65.5% in constant currency, and amounted to $200.0 million, or $198.9 million in constant currency.
Cash flows from operating activities increased by 14.9% to $326.7 million, mainly from the timing of payments of trade and other payables and higher adjusted EBITDA.
At its October 31, 2024 meeting, the Board of Directors of Cogeco declared a quarterly eligible dividend of $0.922 per share, an increase of 8.0% compared to $0.854 per share last year.

FISCAL 2025 FINANCIAL GUIDELINES

Cogeco released its fiscal 2025 financial guidelines. Fiscal 2025 will be the first year of a three-year transformation program, where investments are made in order to set the Corporation on a path to sustainable growth. On a constant currency basis, the Corporation expects fiscal 2025 revenue to remain stable resulting from a combination of Internet subscriber growth and a decline in video and wireline phone subscriptions. On a constant currency basis, fiscal 2025 adjusted EBITDA is anticipated to remain stable, mainly due to stable revenue as well as stable operating expenses, which are anticipated to benefit from the recent corporate reorganization and other operational improvements, offset by investments into new capabilities as part of a three-year transformation program. Net capital expenditures are anticipated to be between $660 and $735 million, including net investments of approximately $140 to $190 million in growth-oriented network expansions, which will increase the Corporation’s footprint in Canada and the United States. Free cash flow and free cash flow, excluding network expansion projects, are expected to decrease between 0% and 10% due to stronger than anticipated free cash flow in fiscal 2024, continued growth-oriented investments, and higher financial expense and current income tax.


	October 31, 2024
	Projections	⁽ⁱ⁾	Actual
	Fiscal 2025 (constant currency)	⁽ⁱⁱ⁾	Fiscal 2024
(In millions of Canadian dollars, except percentages)	$		$

Financial guidelines
Revenue	Stable		3,074
Adjusted EBITDA	Stable		1,455
Net capital expenditures	$660 to $735		643
Net capital expenditures in connection with network expansion projects	$140 to $190		137
Free cash flow	Decrease of 0% to 10%	⁽ⁱⁱⁱ⁾	476
Free cash flow, excluding network expansion projects	Decrease of 0% to 10%	⁽ⁱⁱⁱ⁾	613

(i)	Percentage of changes compared to fiscal 2024.
(ii)	Fiscal 2025 financial guidelines are based on a USD/CDN constant exchange rate of 1.3606 USD/CDN.
(iii)	The assumed current income tax effective rate is approximately 14%.

These financial guidelines, including the various assumptions underlying them, contain forward-looking statements concerning the business outlook for Cogeco, and should be read in conjunction with the “Forward-looking statements” section of this press release.


(1)	During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation. For further details, please refer to the “Non-IFRS Accounting Standards and other financial measures” section of this press release.
(2)	Adjusted EBITDA and net capital expenditures are total of segments measures. Constant currency basis, adjusted profit attributable to owners of the Corporation, net capital expenditures, excluding network expansion projects, free cash flow and free cash flow, excluding network expansion projects are non-IFRS Accounting Standards measures. Change in constant currency and adjusted diluted earnings per share are non-IFRS Accounting Standards ratios. These indicated terms do not have standardized definitions prescribed by IFRS^® Accounting Standards, as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) and therefore, may not be comparable to similar measures presented by other companies. For more information on these financial measures, please consult the “Non-IFRS Accounting Standards and other financial measures” section of this press release.
(3)	Excludes the impact of non-cash impairment charges, and acquisition, integration, restructuring and other costs, net of tax and non-controlling interest.
(4)	Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance.
(5)	Organic growth calculated by excluding additions resulting from acquisitions.

Financial highlights

Three months and years ended August 31	2024	2023	⁽¹⁾	Change	Change in constant currency	⁽²⁾ ⁽³⁾	2024	2023	⁽¹⁾	Change	Change in constant currency	⁽²⁾ ⁽³⁾
(In thousands of Canadian dollars, except % and per share data)	$	$		%	%		$	$		%	%
Operations
Revenue	768,656	766,652		0.3	(1.0)		3,073,985	3,081,136		(0.2)	(0.7)
Adjusted EBITDA ⁽³⁾	371,216	351,925		5.5	4.2		1,454,817	1,432,929		1.5	1.0
Acquisition, integration, restructuring and other costs ⁽⁴⁾	12,177	15,239		(20.1)			63,298	36,245		74.6
Impairment of property, plant and equipment, intangible assets and goodwill	15,229	—		—			15,229	88,000		(82.7)
Profit for the period	81,437	90,521		(10.0)			349,381	350,235		(0.2)
Profit for the period attributable to owners of the Corporation	19,248	29,234		(34.2)			96,746	70,630		37.0
Adjusted profit attributable to owners of the Corporation⁽³⁾⁽⁵⁾	25,562	33,006		(22.6)			119,048	149,298		(20.3)
Cash flow
Cash flows from operating activities	326,723	284,370		14.9			1,185,150	968,214		22.4
Free cash flow ⁽¹⁾⁽³⁾	143,055	87,274		63.9	63.4		475,765	424,083		12.2	12.0
Free cash flow, excluding network expansion projects ⁽¹⁾⁽³⁾	199,966	120,202		66.4	65.5		613,159	596,918		2.7	2.4
Acquisition of property, plant and equipment	156,577	207,434		(24.5)			664,004	806,237		(17.6)
Net capital expenditures ⁽³⁾⁽⁶⁾	154,570	178,481		(13.4)	(14.7)		642,747	702,913		(8.6)	(9.0)
Net capital expenditures, excluding network expansion projects ⁽³⁾	97,659	145,553		(32.9)	(34.1)		505,353	530,078		(4.7)	(5.1)
Per share data ⁽⁷⁾
Earnings per share
Basic	2.02	1.89		6.9			8.63	4.53		90.5
Diluted	1.99	1.87		6.4			8.55	4.51		89.6
Adjusted diluted ⁽³⁾⁽⁵⁾	2.65	2.12		25.0			10.52	9.53		10.4
Dividends per share	0.854	0.731		16.8			3.416	2.924		16.8

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Proceeds on disposals of property, plant and equipment amounted to $0.6 million and $3.4 million for the three-month period and year ended August 31, 2024, respectively ($1.0 million and $2.7 million, respectively, in fiscal 2023). Comparative figures were restated to conform to the current presentation. For further details, please refer to the “Non-IFRS Accounting Standards and other financial measures” section of this press release.
(2)	Key performance indicators presented on a constant currency basis are obtained by translating financial results from the current periods denominated in US dollars at the foreign exchange rate of the comparable periods of the prior year. For the three-month period and year ended August 31, 2023, the average foreign exchange rates used for translation were 1.3329 USD/CDN and 1.3467 USD/CDN, respectively.
(3)	Adjusted EBITDA and net capital expenditures are total of segments measures. Adjusted profit attributable to owners of the Corporation, free cash flow, free cash flow, excluding network expansion projects and net capital expenditures, excluding network expansion projects are non-IFRS Accounting Standards measures. Change in constant currency and adjusted diluted earnings per share are non-IFRS Accounting Standards ratios. These indicated terms do not have standardized definitions prescribed by IFRS Accounting Standards and therefore, may not be comparable to similar measures presented by other companies. For more information on these financial measures, please consult the “Non-IFRS Accounting Standards and other financial measures” section of this press release.
(4)	For the three-month period and year ended August 31, 2024, acquisition, integration, restructuring and other costs were mostly related to restructuring costs recognized during the second half of the year, including costs related to the new organizational structure announced in May 2024 and other cost optimization initiatives. For the three-month period and year ended August 31, 2023, acquisition, integration, restructuring and other costs resulted mostly from costs related to the integration of past acquisitions, as well as acquisition and integration costs incurred in connection with the acquisition of oxio, completed on March 3, 2023, from restructuring costs associated with organizational changes during the fourth quarter of fiscal 2023 within the Canadian and the American telecommunications segments and from configuration and customization costs related to cloud computing arrangements. Furthermore, a retroactive adjustment of $8.4 million was recognized in fiscal 2023 following the Copyright Board preliminary conclusions on the redetermination of the 2014-2018 royalty rates, of which $4.2 million was reversed during the second quarter of fiscal 2024 following the Copyright Board decision issued in January 2024.
(5)	Excludes the impact of non-cash impairment charges, acquisition, integration, restructuring and other costs, and gains/losses on debt modification and/or extinguishment, all net of tax and non-controlling interest.
(6)	Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance.
(7)	Per multiple and subordinate voting share.

As at	August 31, 2024	August 31, 2023
(In thousands of Canadian dollars, except %)	$	$
Financial condition
Cash and cash equivalents	77,746	363,854
Total assets	9,773,739	9,869,778
Long-term debt
Current	370,108	43,325
Non-current	4,594,057	5,045,672
Net indebtedness ⁽¹⁾	4,957,594	4,817,113
Equity attributable to owners of the Corporation	810,437	925,863
Return on equity ⁽²⁾	11.1 %	7.7 %

(1)	Net indebtedness is a capital management measure. For more information on this financial measure, please consult the “Non-IFRS Accounting Standards and other financial measures” section of the Corporation’s MD&A for the year ended August 31, 2024, available on SEDAR+ at www.sedarplus.ca.
(2)	Return on equity is a supplementary financial measure and is calculated as profit attributable to owners of the Corporation for the year divided by the average of the equity attributable to owners of the Corporation for the year.

Forward-looking statements

Certain statements contained in this press release may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Cogeco Inc.’s (“Cogeco” or the “Corporation”) future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as “may”; “will”; “should”; “expect”; “plan”; “anticipate”; “believe”; “intend”; “estimate”; “predict”; “potential”; “continue”; “foresee”, “ensure” or other similar expressions concerning matters that are not historical facts. Particularly, statements relating to the Corporation’s financial guidelines, future operating results and economic performance, objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, purchase price allocation, tax rates, weighted average cost of capital, performance and business prospects and opportunities, which Cogeco believes are reasonable as of the current date. Refer in particular to the “Corporate objectives and strategy” and “Fiscal 2025 financial guidelines” sections of the Corporation’s Fiscal 2024 annual Management’s Discussion and Analysis (“MD&A”) for a discussion of certain key economic, market and operational assumptions we have made in preparing forward-looking statements. While management considers these assumptions to be reasonable based on information currently available to the Corporation, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what Cogeco currently expects. These factors include risks such as general market conditions, competitive risks (including changing competitive and technology ecosystems and disruptive competitive strategies adopted by our competitors), business risks, regulatory risks, tax risks, technology risks (including cybersecurity), financial risks (including variations in currency and interest rates), economic conditions (including inflation pressuring revenue, reduced consumer spending and increasing costs), talent management risks (including the highly competitive market for a limited pool of digitally skilled employees), human-caused and natural threats to the Corporation’s network (including increased frequency of extreme weather events with the potential to disrupt operations), infrastructure and systems, sustainability and sustainability reporting risks, ethical behavior risks, ownership risks, litigation risks and public health and safety, many of which are beyond the Corporation’s control. Moreover, the Corporation’s radio operations are significantly exposed to advertising budgets from the retail industry, which can fluctuate due to increased competition and changing economic conditions. For more exhaustive information on these risks and uncertainties, the reader should refer to the “Uncertainties and main risk factors” section of the Corporation’s Fiscal 2024 annual MD&A. These factors are not intended to represent a complete list of the factors that could affect Cogeco and future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forward-looking information contained in this press release and the forward-looking statements contained in this press release represent Cogeco’s expectations as of the date of this press release (or as of the date they are otherwise stated to be made) and are subject to change after such date. While management may elect to do so, the Corporation is under no obligation (and expressly disclaims any such obligation) and does not undertake to update or alter this information at any particular time, whether as a result of new information, future events or otherwise, except as required by law.

Non-IFRS Accounting Standards and other financial measures

This press release includes references to non-IFRS Accounting Standards and other financial measures used by Cogeco. These financial measures are reviewed in assessing the performance of Cogeco and used in the decision-making process with regard to its business units.


Specified non-IFRS Accounting Standards measure	Used in the component of the following non-IFRS Accounting Standards ratio
Adjusted profit attributable to owners of the Corporation	Adjusted diluted earnings per share

Constant currency basis and foreign exchange impact reconciliation

Consolidated

Three months ended August 31

2024

2023

⁽¹⁾

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

768,656

(9,731)

758,925

766,652

0.3

(1.0)

Operating expenses

397,440

(5,234)

392,206

414,727

(4.2)

(5.4)

Adjusted EBITDA

371,216

(4,497)

366,719

351,925

5.5

4.2

Free cash flow⁽¹⁾

143,055

(462)

142,593

87,274

63.9

63.4

Net capital expenditures

154,570

(2,254)

152,316

178,481

(13.4)

(14.7)

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its free cash flow calculation to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.

Years ended August 31

2024

2023

⁽¹⁾

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

3,073,985

(15,024)

3,058,961

3,081,136

(0.2)

(0.7)

Operating expenses

1,619,168

(8,121)

1,611,047

1,648,207

(1.8)

(2.3)

Adjusted EBITDA

1,454,817

(6,903)

1,447,914

1,432,929

1.5

1.0

Free cash flow⁽¹⁾

475,765

(932)

474,833

424,083

12.2

12.0

Net capital expenditures

642,747

(3,340)

639,407

702,913

(8.6)

(9.0)

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its free cash flow calculation to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.

Canadian telecommunications segment

Three months ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

378,702

—

378,702

375,754

0.8

Operating expenses

175,688

(288)

175,400

180,183

(2.5)

(2.7)

Adjusted EBITDA

203,014

288

203,302

195,571

3.8

4.0

Net capital expenditures

71,000

(245)

70,755

73,348

(3.2)

(3.5)

Years ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

1,510,506

—

1,510,506

1,489,915

1.4

Operating expenses

710,706

(447)

710,259

701,717

1.3

1.2

Adjusted EBITDA

799,800

447

800,247

788,198

1.5

Net capital expenditures

356,274

(463)

355,811

354,384

0.5

0.4

American telecommunications segment

Three months ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

369,049

(9,731)

359,318

367,643

0.4

(2.3)

Operating expenses

185,588

(4,916)

180,672

193,172

(3.9)

(6.5)

Adjusted EBITDA

183,461

(4,815)

178,646

174,471

5.2

2.4

Net capital expenditures

76,238

(2,011)

74,227

100,488

(24.1)

(26.1)

Years ended August 31

2024

2023

Change

(In thousands of Canadian dollars, except percentages)

Actual

Foreign
exchange
impact

constant
currency

Actual

Actual

constant
currency

Revenue

1,466,018

(15,024)

1,450,994

1,494,213

(1.9)

(2.9)

Operating expenses

759,658

(7,632)

752,026

800,409

(5.1)

(6.0)

Adjusted EBITDA

706,360

(7,392)

698,968

693,804

1.8

0.7

Net capital expenditures

267,728

(2,865)

264,863

336,910

(20.5)

(21.4)

Adjusted profit attributable to owners of the Corporation


	Three months ended August 31		Years ended August 31
	2024	2023	2024	2023
(In thousands of Canadian dollars)	$	$	$	$
Profit for the period attributable to owners of the Corporation	19,248	29,234	96,746	70,630
Impairment of property, plant and equipment, intangible assets and goodwill	15,229	—	15,229	88,000
Acquisition, integration, restructuring and other costs	12,177	15,239	63,298	36,245
Loss on debt extinguishment⁽¹⁾	—	—	16,880	—
Tax impact for the above items	(7,173)	(3,832)	(25,151)	(27,770)
Non-controlling interest impact for the above items	(13,919)	(7,635)	(47,954)	(17,807)
Adjusted profit attributable to owners of the Corporation	25,562	33,006	119,048	149,298

(1)	Included within financial expense.

Free cash flow and free cash flow, excluding network expansion projects reconciliations


	Three months ended August 31			Years ended August 31
	2024	2023	⁽¹⁾	2024	2023	⁽¹⁾
(In thousands of Canadian dollars)	$	$		$	$
Cash flows from operating activities	326,723	284,370		1,185,150	968,214
Changes in other non-cash operating activities	(44,264)	(12,970)		(58,459)	102,422
Income taxes paid	6,124	2,190		4,890	91,968
Current income taxes	(682)	(5,523)		(20,995)	(31,973)
Interest paid	74,150	66,544		275,283	243,321
Financial expense	(64,461)	(71,198)		(286,672)	(255,010)
Loss on debt extinguishment⁽²⁾	—	—		16,880	—
Amortization of deferred transaction costs and discounts on long-term debt ⁽²⁾	2,257	3,212		9,336	12,672
Net capital expenditures ⁽³⁾	(154,570)	(178,481)		(642,747)	(702,913)
Proceeds on disposals of property, plant and equipment ⁽¹⁾	594	1,037		3,381	2,653
Repayment of lease liabilities	(2,816)	(1,907)		(10,282)	(7,271)
Free cash flow⁽¹⁾	143,055	87,274		475,765	424,083
Net capital expenditures in connection with network expansion projects	56,911	32,928		137,394	172,835
Free cash flow, excluding network expansion projects⁽¹⁾	199,966	120,202		613,159	596,918

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.
(2)	Included within financial expense.
(3)	Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance.

Net capital expenditures reconciliation


	Three months ended August 31		Years ended August 31
	2024	2023	2024	2023
(In thousands of Canadian dollars)	$	$	$	$
Acquisition of property, plant and equipment	156,577	207,434	664,004	806,237
Subsidies received in advance recognized as a reduction of the cost of property, plant and equipment during the period	(2,007)	(28,953)	(21,257)	(103,324)
Net capital expenditures	154,570	178,481	642,747	702,913

Adjusted EBITDA reconciliation


	Three months ended August 31		Years ended August 31
	2024	2023	2024	2023
(In thousands of Canadian dollars)	$	$	$	$
Profit for the period	81,437	90,521	349,381	350,235
Income taxes	14,262	17,827	61,808	78,379
Financial expense	64,461	71,198	286,672	255,010
Impairment of property, plant and equipment, intangible assets and goodwill	15,229	—	15,229	88,000
Depreciation and amortization	183,650	157,140	678,429	625,060
Acquisition, integration, restructuring and other costs	12,177	15,239	63,298	36,245
Adjusted EBITDA	371,216	351,925	1,454,817	1,432,929

Net capital expenditures and free cash flow excluding network expansion projects reconciliations

Net capital expenditures


Three months ended August 31	2024			2023		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual	Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$	%	%
Net capital expenditures	154,570	(2,254)	152,316	178,481	(13.4)	(14.7)
Net capital expenditures in connection with network expansion projects	56,911	(576)	56,335	32,928	72.8	71.1
Net capital expenditures, excluding network expansion projects	97,659	(1,678)	95,981	145,553	(32.9)	(34.1)


Years ended August 31	2024			2023		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual	Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$	%	%
Net capital expenditures	642,747	(3,340)	639,407	702,913	(8.6)	(9.0)
Net capital expenditures in connection with network expansion projects	137,394	(780)	136,614	172,835	(20.5)	(21.0)
Net capital expenditures, excluding network expansion projects	505,353	(2,560)	502,793	530,078	(4.7)	(5.1)

Free cash flow


Three months ended August 31	2024			2023	⁽¹⁾		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual		Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$		%	%
Free cash flow⁽¹⁾	143,055	(462)	142,593	87,274		63.9	63.4
Net capital expenditures in connection with network expansion projects	56,911	(576)	56,335	32,928		72.8	71.1
Free cash flow, excluding network expansion projects⁽¹⁾	199,966	(1,038)	198,928	120,202		66.4	65.5

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.


Years ended August 31	2024			2023	⁽¹⁾		Change
(In thousands of Canadian dollars, except percentages)	Actual	Foreign exchange impact	In constant currency	Actual		Actual	In constant currency
(In thousands of Canadian dollars, except percentages)	$	$	$	$		%	%
Free cash flow⁽¹⁾	475,765	(932)	474,833	424,083		12.2	12.0
Net capital expenditures in connection with network expansion projects	137,394	(780)	136,614	172,835		(20.5)	(21.0)
Free cash flow, excluding network expansion projects⁽¹⁾	613,159	(1,712)	611,447	596,918		2.7	2.4

(1)	During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment. Comparative figures were restated to conform to the current presentation.

Additional information

Additional information relating to the Corporation, including its Annual Information Form, is available on SEDAR+ at www.sedarplus.ca and on the Corporation’s website at corpo.cogeco.com.

About Cogeco Inc.

Cogeco Inc. is a North American leader in the telecommunications and media sectors. Through Cogeco Communications Inc., we provide world-class Internet, video and wireline phone services to 1.6 million residential and business subscribers in Canada and thirteen states in the United States. We also offer wireless services in most of our U.S. operating territory. Through Cogeco Media, we operate 21 radio stations in Canada, primarily in the province of Québec, as well as a news agency. We take pride in our strong presence in the communities we serve and in our commitment to a sustainable future. Both Cogeco Inc.’s and Cogeco Communications Inc.’s subordinate voting shares are listed on the Toronto Stock Exchange CGO.

For information:
Investors
Troy Crandall
Head, Investor Relations
Cogeco Inc.
Tel.: 514 764-4600
troy.crandall@cogeco.com

Media
Claudja Joseph
Director, Communications & DEI
Cogeco Inc.
Tel.: 514 764-4600
claudja.joseph@cogeco.com

Conference Call:	Friday, November 1^st, 2024 at 11:00 a.m. (Eastern Daylight Time)

	A live audio of the analyst conference call will be available on both the Investor Relations and the Events and Presentations pages on Cogeco’s website. Financial analysts will be able to access the live conference call and ask questions. Media representatives may attend as listeners only. A recording of the conference call will be available on Cogeco’s website for a three-month period.

	Please use the following dial-in number to access the conference call 10 minutes before the start of the conference:

	Local – Toronto: 1 289 514-5100
	Toll Free – North America: 1 800 717-1738

	To join this conference call, participants are required to provide the operator with the name of the company hosting the call, that is, Cogeco Inc. or Cogeco Communications Inc.

SOURCE Cogeco Inc.

View original content: http://www.newswire.ca/en/releases/archive/October2024/31/c7345.html

Earnings News

Black Diamond Reports Third Quarter 2024 Results and Increases Dividend by 17%

01.11.2024 by admin

CALGARY, Alberta, Oct. 31, 2024 (GLOBE NEWSWIRE) — Black Diamond Group Limited (“Black Diamond”, the “Company” or “we”), BDI, a leading provider of space rental and workforce accommodation solutions, today announced its operating and financial results for the three and nine months ended September 30, 2024 (the “Quarter”) compared with the three and nine months ended September 30, 2023 (the “Comparative Quarter”). All financial figures are expressed in Canadian dollars.

Key Highlights from the Third Quarter of 2024

Consolidated rental revenue of $37.9 million decreased a modest 4% as compared to the Comparative Quarter and was up 7% from the second quarter of 2024. Modular Space Solutions (“MSS”) rental revenue of $24.5 million, was another quarterly record and increased 11% from $22.0 million in the Comparative Quarter, while Workforce Solutions (“WFS”) rental revenue was down 23% to $13.4 million due to the completion of two large pipeline projects at the end of 2023.
Adjusted EBITDA¹of $28.8 million was down 21% from the Comparative Quarter primarily due to lower contribution from WFS, a positive settlement recognized in the Comparative Quarter of $2.1 million related to a customer dispute from a prior year related to one project (“2023 Settlement”), as well as slightly lower custom sales contribution from MSS.
Consolidated contracted future rental revenue at the end of the Quarter continued to grow and was up 27% from $128.6 million at the end of the Comparative Quarter to $163.8 million.
Total capital expenditures for the Quarter and Year of $23.8 million and $94.5 million is up 18% and 71% respectively and highlights the organic growth opportunities Management continues to see across the platform to drive growing contracted future rental revenue.
Return on Assets¹ of 19% for the Quarter continues to represent an attractive return profile given the long-life and low maintenance characteristics of the Company’s rental assets.
MSS average monthly rental rate per unit increased 10% from the Comparative Quarter (or 9% on a constant currency basis), while contracted future rental revenue increased 28% to $127.6 million at the end of the Quarter from $99.7 million at the end of the Comparative Quarter.
WFS contracted future rental revenue from contracts in place was $36.2 million, an increase of 25% from the Comparative Quarter.
LodgeLink net revenue was a record $3.4 million, an increase of 26% from $2.7 million in the Comparative Quarter. Total room nights sold increased 34% from the Comparative Quarter, to a record of 147,560.
Long term debt and Net Debt¹at the end of the Quarter increased 28% and 24% since December 31, 2023, to $243.2 million and $228.4 million, respectively. The increase is primarily attributable to growth capital expenditure during the year. Net Debt to trailing twelve month (“TTM”) Adjusted Leverage EBITDA¹ of 2.2x is at the low-end of the Company’s target range of 2.0x to 3.0x, while available liquidity was $98.4 million at the end of the Quarter.
Given continued strength across the rental platform, subsequent to the end of the Quarter, the Company announced a 17% increase to its quarterly dividend from $0.03 to $0.035 per quarter. The fourth quarter dividend of $0.035 is payable on or about January 15, 2025 to shareholders of record on December 31, 2024.

Outlook

The Company remains well-positioned for continued growth for the remainder of 2024 and into 2025. The positive outlook for the business is driven in-part by over $163.8 million of contracted future rental revenue, up 27% from the end of the Comparative Quarter. The meaningful growth in future contracted rental revenues has been driven by the Company’s disciplined organic growth initiatives this year with $94.5 million of gross capital expenditures for the Year, as well as renewals of existing contracts.

During the Quarter, MSS generated a record $24.5 million in rental revenue, up 11% from the Comparative Quarter, driven by increased average rental rates and ongoing organic fleet investment, slightly offset by a moderate decline in utilization. Current utilization remains at healthy levels for the MSS platform in the context of long-term industry trends. Sales revenue declined 25% from a historically strong Comparative Quarter, but increased from the first half of 2024 as previously delayed projects reach completion. Non-rental revenue in the Quarter was up 24% from the Comparative Quarter, as installation activity remained robust for both the rental fleet and custom sales. MSS contracted future rental revenue continues to grow and ended the Quarter at $127.6 million, up 28% or $27.9 million from the Comparative Quarter, with an average rental duration of 51 months. Demand remains strong in key infrastructure and education verticals which continues to support ongoing deployment of organic fleet growth into 2025.

For the Year, WFS performance is modestly below the Prior Year with revenue and Adjusted EBITDA down 12% and 6%, respectively, despite the completion of two large projects at the end of 2023. For the Quarter, revenue and Adjusted EBITDA was down 31% and 39%, respectively, primarily due to a high degree of contribution from these aforementioned projects in the Comparative Quarter. Management continues to focus on growing rental revenues through improving utilization across our WFS geographies amidst a generally higher rate environment. The WFS sales pipeline and opportunity set remain robust with contracted future rental revenue increasing 25% to $36.2 million.

LodgeLink performance continued to set quarterly records as Gross Bookings¹ for the Quarter were up 31% to $27.2 million and net revenue grew 26% from the Comparative Quarter to a record $3.4 million. Total room nights sold in the Quarter rose 34% from the Comparative Quarter to a record 147,560. The LodgeLink supply network also continues to scale with over 1.7 million rooms of capacity in over 17,000 North American properties. Management remains focused on efficiently growing LodgeLink net revenue and based on current trends, expects modest positive EBITDA contribution from LodgeLink in 2025.

With respect to the Company’s ongoing ERP upgrade and implementation project, the Company has set a remaining budget of $11.9 million for the ERP upgrade related to Black Diamond’s MSS and Corporate segments with anticipated implementation in early 2026.

Black Diamond remains focused on driving profitable growth while compounding the Company’s high-margin, recurring rental revenue streams in both North America and Australia. The Company is well positioned to fund continued organic and inorganic growth with liquidity of $98.4 million, and Net Debt to TTM Adjusted Leverage EBITDA¹ of 2.2x, which is at the low end of the Company’s targeted range of 2.0x to 3.0x. The outlook to close out calendar 2024 remains positive and the Company maintains strong momentum into 2025 supported by healthy contracted rental revenues, a growing fleet of long-lived assets, a robust sales pipeline, and the continued scaling of LodgeLink.

¹Adjusted EBITDA, Net Debt and Gross Bookings are non-GAAP financial measures. Return on Assets, Net Revenue Margin and Net Debt to TTM Adjusted Leverage EBITDA are non-GAAP ratios. Refer to the Non-GAAP Measures section of this news release for more information on each non-GAAP financial measure and ratio.

Third Quarter 2024 Financial Highlights

	Three months ended September 30,			Nine months ended September 30,
($ millions, except as noted)	2024	2023	Change	2024	2023	Change
Financial Highlights	$	$	%	$	$	%
Total revenue	101.2	117.5	(14)%	270.3	290.1	(7)%
Gross profit	46.7	54.2	(14)%	128.5	130.9	(2)%
Administrative expenses	18.2	17.5	4%	55.0	50.3	9%
Adjusted EBITDA⁽¹⁾	28.8	36.6	(21)%	76.2	80.5	(5)%
Adjusted EBIT⁽¹⁾	16.2	24.0	(33)%	41.7	47.5	(12)%
Funds from Operations⁽¹⁾	31.2	39.2	(20)%	80.5	86.7	(7)%
Per share ($)	0.51	0.65	(22)%	1.32	1.44	(8)%
Profit before income taxes	10.3	18.7	(45)%	22.6	32.0	(29)%
Profit	7.4	13.6	(46)%	16.3	22.5	(28)%
Earnings per share – Basic ($)	0.12	0.22	(45)%	0.27	0.37	(27)%
Earnings per share – Diluted ($)	0.12	0.22	(45)%	0.26	0.37	(30)%
Capital expenditures	23.8	20.1	18%	94.5	55.2	71%
Property & equipment	571.1	510.1	12%	571.1	510.1	12%
Total assets	745.5	669.3	11%	745.5	669.3	11%
Long-term debt	243.2	206.1	18%	243.2	206.1	18%
Cash and cash equivalents	15.1	5.6	170%	15.1	5.6	170%
Return on Assets (%)⁽¹⁾	19.3%	27.3%	(800) bps	17.5%	20.2%	(270) bps
Free Cashflow⁽¹⁾	19.6	30.6	(36)%	47.2	60.8	(22)%
^{(1) Adjusted EBITDA, Adjusted EBIT, Funds from Operations and Free Cashflow are non-GAAP financial measures. Return on Assets is a non-GAAP ratio. Refer to the Non-GAAP Measures section of this news release for more information on each non-GAAP financial measure and ratio.}

Additional Information

A copy of the Company’s unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023 and related management’s discussion and analysis have been filed with the Canadian securities regulatory authorities and may be accessed through the SEDAR+ website (www.sedarplus.ca) and www.blackdiamondgroup.com.

About Black Diamond Group

Black Diamond is a specialty rentals and industrial services company with two operating business units – MSS and WFS. We operate in Canada, the United States, and Australia.

MSS through its principal brands, BOXX Modular, CLM, MPA Systems, and Schiavi, owns a large rental fleet of modular buildings of various types and sizes. Its network of local branches rent, sell, service, and provide ancillary products and services to a diverse customer base in the construction, industrial, education, financial, and government sectors.

WFS owns a large rental fleet of modular accommodation assets of various types. Its regional operating terminals rent, sell, service, and provide ancillary products and services including turnkey operated camps to a wide array of customers in the resource, infrastructure, construction, disaster recovery, and education sectors.

In addition, WFS includes LodgeLink which operates a digital marketplace for business-to-business crew accommodation, travel, and logistics services across North America. The LodgeLink proprietary digital platform enables customers to efficiently find, book, and manage their crew travel and accommodation needs through a rapidly growing network of hotel, remote lodge, and travel partners. LodgeLink exists to solve the unique challenges associated with crew travel and applies technology to eliminate inefficiencies at every step of the crew travel process from booking, to management, to payments, to cost reporting.

Learn more at www.blackdiamondgroup.com.

For investor inquiries please contact Jason Zhang at 403-206-4739 or investor@blackdiamondgroup.com.

Conference Call

Black Diamond will hold a conference call and webcast at 9:00 a.m. MT (11:00 a.m. ET) on Friday, November 1, 2024. CEO Trevor Haynes and CFO Toby LaBrie will discuss Black Diamond’s financial results for the Quarter and then take questions from investors and analysts.

To access the conference call by telephone dial toll free 1-844-763-8274. International callers should use 1-647-484-8814. Please connect approximately 10 minutes prior to the beginning of the call.

To access the call via webcast, please log into the webcast link 10 minutes before the start time at:
https://www.gowebcasting.com/13707

Following the conference call, a replay will be available on the Investor Centre section of the Company’s website at www.blackdiamondgroup.com, under Presentations & Events.
https://www.gowebcasting.com/13707

Reader Advisory

Forward-Looking Statements
Certain information set forth in this news release contains forward-looking statements including, but not limited to, the Company’s outlook for the remainder of 2024 and into 2025, expectations for and opportunities in different geographic areas, opportunities for organic investment, the Company’s ability to fund organic and inorganic growth, the sales and opportunity pipeline, timing and payment of a fourth quarter dividend, the anticipated timeline for the Company’s Enterprise Resource Planning (“ERP”) system upgrade and implementation project, management’s assessment of Black Diamond’s future operations and what may have an impact on them, expectations regarding the rental rate environment, opportunities and effect of deploying investment capital, financial performance, business prospects and opportunities, changing operating environment including changing activity levels, effects on demand and performance based on the changing operating environment, expectations for demand and growth in the Company’s operating and customer segments, future deployment of assets, amount of revenue anticipated to be derived from current contracts, anticipated debt levels, liquidity demands and sources, ongoing contractual terms and debt obligations, liquidity, working capital and other requirements, sources and use of funds, economic life of the Company’s assets, expected length of existing contracts and future growth and profitability of the Company. With respect to the forward-looking statements in this news release, Black Diamond has made assumptions regarding, among other things: future commodity prices, the future rate environment, that Black Diamond will continue to raise sufficient capital to fund its business plans in a manner consistent with past operations, timing and cost estimates of a new ERP system, that counterparties to contracts will perform the contracts as written and that there will be no unforeseen material delays in contracted projects. Although Black Diamond believes that the expectations reflected in the forward-looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurances that such expectations or assumptions will prove to be correct. Readers are cautioned that assumptions used in the preparation of such statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of Black Diamond. These risks include, but are not limited to: volatility of industry conditions, the Company’s ability to attract new customers, political conditions, dependence on agreements and contracts, competition, credit risk, information technology systems and cyber security, vulnerability to market changes, operating risks and insurance, weakness in industrial construction and infrastructure developments, weakness in natural resource industries, access to additional financing, dependence on suppliers and manufacturers, reliance on key personnel, and workforce availability. The risks outlined above should not be construed as exhaustive. Additional information on these and other factors that could affect Black Diamond’s operations and financial results are included in Black Diamond’s annual information form for the year ended December 31, 2023 and other reports on file with the Canadian securities regulatory authorities which can be accessed on Black Diamond’s profile on SEDAR+. Readers are cautioned not to place undue reliance on these forward-looking statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Black Diamond does not undertake any obligation to update or revise any of the forward-looking statements, except as may be required by applicable securities laws.

Non-GAAP Measures
In this news release, the following specified financial measures and ratios have been disclosed: Adjusted EBITDA, Adjusted EBIT, Adjusted EBITDA as a % of Revenue, Return on Assets, Net Debt, Net Debt to TTM Adjusted Leverage EBITDA, Funds from Operations, Free Cashflow, Gross Bookings, and Net Revenue Margin. These non-GAAP and other financial measures do not have any standardized meaning prescribed under International Financial Reporting Standards (“IFRS”) and therefore may not be comparable to similar measures presented by other entities. Readers are cautioned that these non-GAAP measures are not alternatives to measures under IFRS and should not, on their own, be construed as an indicator of the Company’s performance or cash flows, a measure of liquidity or as a measure of actual return on the common shares of the Company. These non-GAAP measures should only be used in conjunction with the consolidated financial statements of the Company.

Adjusted EBITDA is not a measure recognized under IFRS and does not have standardized meanings prescribed by IFRS. Adjusted EBITDA refers to consolidated earnings before finance costs, tax expense, depreciation, amortization, accretion, foreign exchange, share-based compensation, acquisition costs, non-controlling interests, share of gains or losses of an associate, write-down of property and equipment, impairment, non-recurring costs, and gains or losses on the sale of non-fleet assets in the normal course of business.

Black Diamond uses Adjusted EBITDA primarily as a measure of operating performance. Management believes that operating performance, as determined by Adjusted EBITDA, is meaningful because it presents the performance of the Company’s operations on a basis which excludes the impact of certain non-cash items as well as how the operations have been financed. In addition, management presents Adjusted EBITDA because it considers it to be an important supplemental measure of the Company’s performance and believes this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in industries with similar capital structures.

Adjusted EBITDA has limitations as an analytical tool, and readers should not consider this item in isolation, or as a substitute for an analysis of the Company’s results as reported under IFRS. Some of the limitations of Adjusted EBITDA are:

Adjusted EBITDA excludes certain income tax payments and recoveries that may represent a reduction or increase in cash available to the Company;
Adjusted EBITDA does not reflect the Company’s cash expenditures, or future requirements, for capital expenditures or contractual commitments;
Adjusted EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs;
Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest payments on the Company’s debt;
depreciation and amortization are non-cash charges, thus the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
other companies in the industry may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to invest in the growth of the Company’s business. The Company compensates for these limitations by relying primarily on the Company’s IFRS results and using Adjusted EBITDA only on a supplementary basis. A reconciliation to profit, the most comparable GAAP measure, is provided below.

Adjusted EBIT is Adjusted EBITDA less depreciation and amortization. Black Diamond uses Adjusted EBIT primarily as a measure of operating performance. Management believes that Adjusted EBIT is a useful measure for investors when analyzing ongoing operating trends. There can be no assurances that additional special items will not occur in future periods, nor that the Company’s definition of Adjusted EBIT is consistent with that of other companies. As such, management believes that it is appropriate to consider both profit determined on a GAAP basis as well as Adjusted EBIT. A reconciliation to profit, the most comparable GAAP measure, is provided below.

Adjusted EBITDA as a % of Revenue is calculated by dividing Adjusted EBITDA by total revenue for the period. Black Diamond uses Adjusted EBITDA as a % of Revenue primarily as a measure of operating performance. Management believes this ratio is an important supplemental measure of the Company’s performance and believes this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in industries with similar capital structures.

Return on Assets is calculated as annualized Adjusted EBITDA divided by average net book value of property and equipment. Annualized Adjusted EBITDA is calculated by multiplying Adjusted EBITDA for the Quarter and Comparative Quarter by an annualized multiplier. Management believes that Return on Assets is a useful financial measure for investors in evaluating operating performance for the periods presented. When read in conjunction with our profit and property and equipment, two GAAP measures, this non-GAAP ratio provides investors with a useful tool to evaluate Black Diamond’s ongoing operations and management of assets from period-to-period.

Reconciliation of Consolidated Profit to Adjusted EBITDA, Adjusted EBIT, Adjusted EBITDA as a % of Revenue and Return on Assets:

	Three months ended September 30,			Nine months ended September 30,
($ millions, except as noted)	2024	2023	Change %	2024	2023	Change %
Profit	7.4	13.6	(46)%	16.3	22.5	(28)%
Add:
Depreciation and amortization⁽¹⁾	12.6	12.6	—%	34.5	33.0	5%
Finance costs⁽¹⁾	4.3	3.7	16%	11.6	10.4	12%
Share-based compensation⁽¹⁾	1.2	1.6	(25)%	4.3	5.1	(16)%
Non-controlling interest⁽¹⁾	0.4	0.3	33%	1.1	0.9	22%
Current income taxes⁽¹⁾	—	—	—%	0.2	0.1	100%
Deferred income taxes	2.6	4.8	(46)%	5.0	8.5	(41)%
Non-recurring costs:
ERP implementation and related costs⁽²⁾	0.3	—	100%	2.6	—	100%
Acquisition costs	—	—	—%	0.6	—	100%
Adjusted EBITDA	28.8	36.6	(21)%	76.2	80.5	(5)%
Less:
Depreciation and amortization⁽¹⁾	12.6	12.6	—%	34.5	33.0	5%
Adjusted EBIT	16.2	24.0	(33)%	41.7	47.5	(12)%

Total revenue⁽¹⁾	101.2	117.5	(14)%	270.3	290.1	(7)%
Adjusted EBITDA as a % of Revenue	28.5%	31.1%	(260) bps	28.2%	27.7%	50 bps

Annualized multiplier	4	4		1.3	1.3
Annualized adjusted EBITDA	115.2	146.4	(21)%	99.1	104.7	(5)%
Average net book value of property and equipment	597.8	535.9	12%	566.3	531.6	7%
Return on Assets	19.3%	27.3%	(800) bps	17.5%	20.2%	(270) bps
^{(1) Sourced from the Company’s unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023.} ^{(2) This relates to the corporate structure reorganization costs that have been incurred in preparation of a new ERP system in which the first phase of the implementation went live on May 1, 2024 and costs are included in administrative expenses.}

Net Debt to TTM Adjusted Leverage EBITDA is a non-GAAP ratio which is calculated as Net Debt divided by trailing twelve months Adjusted Leverage EBITDA. Net Debt, a non-GAAP financial measure, is calculated as long-term debt minus cash and cash equivalents. A reconciliation to long-term debt, the most comparable GAAP measure, is provided below. Net Debt and Net Debt to TTM Adjusted Leverage EBITDA removes cash and cash equivalents from the Company’s debt balance. Black Diamond uses this ratio primarily as a measure of operating performance. Management believes this ratio is an important supplemental measure of the Company’s performance and believes this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in industries with similar capital structures. In the quarter ended June 30, 2022, Net Debt to TTM Adjusted EBITDA was renamed Net Debt to TTM Adjusted Leverage EBITDA, to provide further clarity on the composition of the denominator to include pre-acquisition estimates of EBITDA from business combinations. Management believes including the additional information in this calculation helps provide information on the impact of trailing operations from business combinations on the Company’s leverage position.

Reconciliation of Consolidated Profit to Adjusted EBITDA, Net Debt and Net Debt to TTM Adjusted Leverage EBITDA:

($ millions, except as noted)	2024	2024	2024	2023	2023	2023	2023	2022	Change
	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4
Profit	7.4	7.5	1.5	7.8	13.6	4.6	4.4	9.4
Add:
Depreciation and amortization	12.6	11.1	10.7	11.2	12.6	10.6	9.8	8.6
Finance costs	4.3	3.4	3.8	3.7	3.7	3.7	2.9	3.6
Share-based compensation	1.2	1.6	1.5	1.1	1.6	1.3	2.2	1.3
Non-controlling interest	0.4	0.4	0.3	0.3	0.3	0.3	0.3	0.4
Current income taxes	—	—	0.2	0.1	—	0.1	—	0.1
Deferred income taxes	2.6	2.1	0.3	0.4	4.8	1.9	1.8	3.7
Impairment reversal	—	—	—	—	—	—	—	(6.3)
Non-recurring costs
ERP implementation and related costs ⁽¹⁾	0.3	1.8	0.5	1.5	—	—	—	—
Acquisition costs	—	—	0.6	—	—	—	—	1.2
Adjusted EBITDA	28.8	27.9	19.4	26.1	36.6	22.5	21.4	22.0
Acquisition pro-forma adjustments⁽²⁾	—	—	—	—	—	—	—	0.5
Adjusted Leverage EBITDA	28.8	27.9	19.4	26.1	36.6	22.5	21.4	22.5

TTM Adjusted Leverage EBITDA	102.2				103.0				(1)%

Long-term debt	243.2				206.1				18%
Cash and cash equivalents	15.1				5.6				170%
Current portion of long term debt ⁽³⁾	0.3				0.3				—%
Net Debt	228.4				200.8				14%
Net Debt to TTM Adjusted Leverage EBITDA	2.2				1.9				16%
^{(1) This relates to the corporate structure reorganization costs that have been incurred in preparation of a new ERP system in which the first phase of implementation went live on May 1, 2024.} ^{(2) Includes pro-forma pre-acquisition EBITDA estimates as if the acquisition that occurred in the fourth quarter 2022, occurred on January 1, 2022.} ^{(3) Current portion of long-term debt relating to the payments due within one year on the bank term loans assumed as part of the acquisition in the fourth quarter of 2022.}

Funds from Operations is calculated as the cash flow from operating activities, the most comparable GAAP measure, excluding the changes in non-cash working capital. Management believes that Funds from Operations is a useful measure as it provides an indication of the funds generated by the operations before working capital adjustments. Changes in long-term accounts receivables and non-cash working capital items have been excluded as such changes are financed using the operating line of Black Diamond’s credit facilities. A reconciliation to cash flow from operating activities, the most comparable GAAP measure, is provided below.

Free Cashflow is calculated as Funds from Operations minus maintenance capital, net interest paid (including lease interest), payment of lease liabilities, net current income tax expense (recovery), distributions declared to non-controlling interest, dividends paid on common shares and dividends paid on preferred shares plus net current income taxes received (paid). Management believes that Free Cashflow is a useful measure as it provides an indication of the funds generated by the operations before working capital adjustments and other items noted above. Management believes this metric is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in industries with similar capital structures. A reconciliation to cash flow from operating activities, the most comparable GAAP measure, is provided below.

Reconciliation of Cash Flow from Operating Activities to Funds from Operations and Free Cashflow:

	Three months ended September 30,			Nine months ended September 30,
($ millions, except as noted)	2024	2023	Change	2024	2023	Change

Cash Flow from Operating Activities⁽¹⁾	31.4	33.5	(6)%	81.2	97.9	(17)%
Add/(Deduct):
Change in other long term assets⁽¹⁾	1.1	0.5	120%	(0.5)	0.1	(600)%
Changes in non-cash operating working capital⁽¹⁾	(1.3)	5.2	(125)%	(0.2)	(11.3)	98%
Funds from Operations	31.2	39.2	(20)%	80.5	86.7	(7)%
Add/(deduct):
Maintenance capital	(3.2)	(1.8)	(78)%	(9.3)	(6.1)	(52)%
Payment for lease liabilities	(2.4)	(2.0)	(20)%	(6.6)	(5.7)	(16)%
Interest paid (including lease interest)	(4.2)	(3.6)	(17)%	(11.5)	(10.0)	(15)%
Net current income tax expense	—	—	—%	0.2	0.1	100%
Dividends paid on common shares	(1.8)	(1.2)	(50)%	(5.5)	(3.6)	(53)%
Distributions paid to non-controlling interest	—	—	—%	(0.6)	(0.6)	—%
Free Cashflow	19.6	30.6	(36)%	47.2	60.8	(22)%
^{(1) Sourced from the Company’s unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023.}

Gross Bookings, a non-GAAP measure, is total revenue billed to the customer which includes all fees and charges. Net revenue, a GAAP measure, is Gross Bookings less costs paid to suppliers. Revenue from bookings at third party lodges and hotels through LodgeLink are recognized on a net revenue basis. LodgeLink is an agent in the transaction as it is not responsible for providing the service to the customer and does not control the service provided by a supplier. Management believes this ratio is an important supplemental measure of LodgeLink’s performance and cash generation and believes this ratio is frequently used by interested parties in the evaluation of companies in industries with similar forms of revenue generation.

Net Revenue Margin is calculated by dividing net revenue by Gross Bookings for the period. Management believes this ratio is an important supplemental measure of LodgeLink’s performance and profitability and believes this ratio is frequently used by interested parties in the evaluation of companies in industries with similar forms revenue generation where companies act as agents in transactions.

Reconciliation of Net Revenue to Gross Bookings and Net Revenue Margin:

	Three months ended September 30,			Nine months ended September 30,
($ millions, except as noted)	2024	2023	Change	2024	2023	Change
Net revenue⁽¹⁾	3.4	2.7	26%	8.9	7.2	24%
Costs paid to suppliers⁽¹⁾	23.8	18.1	31%	64.2	51.6	24%
Gross Bookings⁽¹⁾	27.2	20.8	31%	73.1	58.8	24%
Net Revenue Margin	12.5%	12.7%	(20) bps	12.2%	12.2%	— bps
^{(1) Includes intercompany transactions.}

Finance News

Stock market today: Nasdaq, S&P 500 poised for rebound amid Amazon cheer, jobs report

01.11.2024 by admin

US stocks were poised for a comeback on Friday as investors digested Amazon (AMZN) and Intel (INTC) earnings and all-important monthly jobs report.

Futures on the Nasdaq 100 (NQ=F) popped 0.6%, while those on the S&P 500 (^GSPC) rose 0.5%, both coming off steep losses fueled by after-earnings tumbles in Meta (META) and Microsoft (MSFT). Dow Jones Industrial Average futures (YM=F) added 0.5%.

Upbeat earnings from Amazon are dissipating the gloom around Big Tech’s prospects that drove Thursday’s slump in stocks. Its shares jumped over 6% in premarket after CEO Andy Jassy said its cloud unit’s AI business was seeing triple-digit revenue growth.

Morale also got a lift from Intel’s (INTC) earnings beat and outlook, which revived hopes for the chipmaker’s turnaround and boosted the stock. But Apple (AAPL) shares slipped as its results and outlook left Wall Street wanting more.

Markets also took in stride disappointing headline numbers from the all-important jobs report, as the US economy added just 12,000 jobs in October, significantly missing expectations. The government said those numbers were weighed down by recent hurricanes and strike activity, most prominently at Boeing (BA).

Markets are currently pricing in about 98% odds of a quarter-point rate cut at the Fed meeting next week, per CME FedWatch.

In corporates, Boeing shares tipped higher after the union backed its latest offer to end a harmful factory workers’ strike. The sweetened deal would lift wages by 38%.

Meanwhile, oil prices rose almost 2% amid revived Mideast fears, after a report that Iran is planning a strike on Israel via militias that it backs in Iraq. Brent (BZ=F) crude futures traded at around $74 a barrel after briefly nudging $75, while West Texas Intermediate (CL=F) futures neared $71.

LIVE 3 updates

Tech stocks in focus: Amazon, Intel, Nvidia rise while Apple sinks

Amazon (AMZN) and Intel (INTC) stocks jumped Friday, lifting Nvidia (NVDA) shares with them.

Amazon stock jumped as much as 7% premarket as the company proved it can balance hefty AI spending with profit growth. The company’s profit jumped more than 50% to over $17 billion in the third quarter, and its 11% operating margin came in above Wall Street’s expectations of just over 9%. At the same time, CEO Andy Jassy said the company will likely rack up $75 billion in expenses for the full year and spend even more next year.

That’s good news for Nvidia, which rose 1.5% premarket. The AI chipmakers’ shares had fallen a day earlier amid fears of moderating AI spending from Big Tech firms. The stock was also helped by positive sentiment on Intel, which itself jumped 7.6% premarket after giving an upbeat fourth quarter outlook. Intel’s guidance lifted chip stocks across the board after a rough few days.

Meanwhile, Apple (AAPL) fell roughly 2% on weaker-than-expected China sales, a hefty EU tax payment and a soft sales outlook for the current period. Apple projected sales will rise in the low-to-mid single digits in the December quarter, lower than the 7% expected by analysts.
Jobs report: Economy adds 12,000 jobs in big miss, unemployment rate holds steady

The US economy added just 12,000 jobs in October, fewer than the 100,000 economists expected. The unemployment rate held steady at 4.1%.

Recent strike activity, most prominently at Boeing (BA), and weather-related disruptions weighed on the labor market last month, the government said.

Yahoo Finance’s Josh Schafer has the details here.
Good morning. Here’s what’s happening today.

news

Earnings News

Lavoro Reports Fiscal Fourth Quarter 2024 Earnings Results¹

01.11.2024 by admin

FY2024 revenue of US$1.89 billion increased 5% year-over-year (flat in BRL terms), driven by market share gains and sales volume growth mitigating deflationary input price headwinds.

FY2024 gross profit decreased -19% to $268.4 million (-23% in BRL), with gross margins compressing by -430 basis points to 14.2%, primarily due to the input price deflation and a less favorable product category sales mix.

The Crop Care² segment was a standout performer for the year, with revenue rising 24% to $150.7 million for FY2024 (+18% BRL), and gross profit of $56.1 million increasing +4% y/y (decreasing -1% in BRL), despite the challenging market environment for specialty products.

Net loss for FY2024 increased to $154.6 million, compared to a net loss of $43.7 million in the previous year, with the change reflecting a decline in gross profit, higher finance costs and income tax headwinds. Adjusted Net Loss was $144.9 million, compared to Adjusted Net Profit of $30.9 million last year, with the variation reflecting lower gross profit, increased finance costs and income tax headwinds.

Adjusted EBITDA³ for FY2024 was $53.4 million, compared to $150.1 million in the previous year, with the decline resulting from lower gross profit, and higher operating expenses.

Net cash flows provided by operations⁴ were $33.1 million (R$165.8 million), compared to $20.9 million (R$108.1 million) in the prior year.

Lavoro provides an outlook for FY2025 detailed later in the release.

SÃO PAULO, Oct. 31, 2024 (GLOBE NEWSWIRE) — Lavoro Limited LVRO LVROW)), the first U.S. listed pure-play agricultural inputs retailer in Latin America, today announced its financial results for the fiscal fourth quarter of 2024, which ended on June 30, 2024. Detailed financial statements provided on Form 6-K as filed with the SEC can be accessed on the Company’s investor relations website at https://ir.lavoroagro.com/disclosure-and-documents/sec-filings/.

Ruy Cunha, CEO of Lavoro, commented, “This past year was one of the most challenging periods for Brazilian agribusiness in the last decade, with the ag inputs retail market estimated to have declined by over 20%. Lavoro navigated these turbulent conditions, gaining market share by focusing on controllable factors and leveraging our scale and verticalized business model. Our Crop Care segment performed well considering the notably challenging conditions for specialty inputs in the Brazilian market.”

“The current market environment reflects a mix of contrasting factors. On the one hand, projections for farmer profitability for the crop year 2024/2025 indicate improvement over the previous year, incentivizing farmers to grow planted acres and to invest in inputs to maximize yields. Additionally, input prices are continuing to show signs of stabilization. On the other hand, reduced bank and government lending to farmers, due in part to the impact from last year’s drought on crop yields, is currently constraining short-term liquidity for farmers, and creating challenges for the broader ag inputs value chain, including Lavoro. Against this backdrop, enhancing gross margin improvement is a key priority for this year.”

__________________________

¹ Financials presented in US dollars in throughout this release are converted using the following average period USD/BRL exchange rate: 5.217 for 4Q24, 4.951 for 3Q24; 4.955 for 2Q24; 4.883 for 1Q24; 4.952 for 4Q23; 5.193 for 3Q23; 5.265 for 2Q23; 5.241 for 1Q23.
² Crop Care financial results shown here, and elsewhere in this release, include intercompany sales to Lavoro, which are eliminated in the consolidated results.
³ Adjusted EBITDA and Adjusted Profit/Loss are non-IFRS measures. Please see reconciliation tables elsewhere in this release.
⁴ Converted to USD using the average USD/BRL for the fiscal year: 5.00 for FY24 and 5.16 for FY23.

FY4Q24 Financial Highlights⁵

Consolidated revenue for Lavoro in 4Q24 increased by 2% year-over-year (y/y) to $271.1 million (+8% in BRL), compared to the prior year period, with positive contributions from Grains revenue associated with our barter operations, which grew +41% to $68.3 million (+48% in BRL). This was partially offset by a decline in Inputs revenue of -6% (-1% in BRL), which reached $202.8 million, reflecting Input revenue declines in Brazil Ag Retail and the effect of converting our results from Brazilian reais to U.S. dollars for ease of reference.

Consolidated gross profit decreased by -4% to $45.2 million in 4Q24 (+2% in BRL). Gross margins contracted by -100 bps y/y to 16.7%, driven by an increased mix of Grains revenue, and the unfavorable impact of product mix in Crop Care, partially offset by an improvement in gross margins for Brazil Ag Retail and Latam Ag Retail.

Gross profit as % of Inputs revenue improved 70 bps y/y to 22.3% in 4Q24, with improvements led primarily by Brazil Ag Retail, partially offset by product mix headwinds in our Crop Care segment.

Net loss for 4Q24 was $77.3 million, compared to a net loss of $19.5 million in the prior year period. The $57.8 million year-over-year increase in net loss was primarily driven by income taxes headwinds ($35 million), and higher finance costs ($22 million). Adjusted Net Loss was $76.2 million, compared to Adjusted Net Loss of $15.2 million in the prior year quarter, with similar key drivers for the year-over-year change.

Adjusted EBITDA was -$2.1 million in 4Q24 compared to $2.4 million in the prior year period, with the change reflecting a decline in gross profit and net other operating income.

__________________________

⁵ Adjusted EBITDA and Adjusted Profit/Loss are non-IFRS measures. Please see reconciliation tables elsewhere in this release.

Consolidated Results (USD)	4Q23	4Q24	Chg. %	FY23	FY24	Chg. %
(in millions of US dollars)

Revenue by Segment	265.5	271.1	2%	1,799.7	1,888.6	5%
Brazil Ag Retail	197.2	192.5	(2%)	1,506.2	1,584.4	5%
Latam Ag Retail	61.8	65.2	5%	233.8	237.8	2%
Crop Care	10.7	19.9	87%	121.2	150.7	24%
Intercompany eliminations	(4.1)	(6.4)		(61.4)	(84.3)

Revenue by Category	265.5	271.1	2%	1,799.7	1,888.6	5%
Inputs revenue	217.0	202.9	(6%)	1,669.4	1,678.7	1%
Grains revenue	48.6	68.3	41%	130.4	209.9	61%

Gross Profit	46.9	45.2	(4%)	332.9	268.4	(19%)
Brazil Ag Retail	26.3	29.8	13%	246.8	182.7	(26%)
Latam Ag Retail	9.4	10.4	10%	38.1	36.8	(3%)
Crop Care	8.1	5.8	(29%)	54.0	56.1	4%
Intercompany elim.	3.1	(0.7)		(6.0)	(7.1)

Gross Margin	17.6%	16.7%	-100 bps	18.5%	14.2%	-430 bps
Brazil Ag Retail	13.3%	15.5%	210 bps	16.4%	11.5%	-490 bps
Latam Ag Retail	15.2%	15.9%	70 bps	16.3%	15.5%	-80 bps
Crop Care	75.9%	28.9%	-4700 bps	44.6%	37.2%	-730 bps

Gross Margin (% of Inputs revenue)	21.6%	22.3%	70 bps	19.9%	16.0%	-400 bps
Brazil Ag Retail	17.7%	23.8%	610 bps	17.9%	13.2%	-460 bps
Latam Ag Retail	15.3%	16.1%	80 bps	16.7%	16.0%	-70 bps
Crop Care	75.9%	28.9%	-4700 bps	44.6%	37.2%	-730 bps

SG&A (excl. D&A)	(55.5)	(51.5)	(7%)	(205.9)	(237.2)	15%
Other operating income (expense)	5.0	2.6		(52.9)	7.4
EBITDA	(3.6)	(3.7)	n.m.	74.1	38.7	(48%)
(+) Adjustment items	6.0	1.5		76.0	14.7
Adjusted EBITDA	2.4	(2.1)	(191%)	150.1	53.4	(64%)
Brazil Ag Retail	3.4	3.0	(13%)	141.6	50.1	(65%)
Latam Ag Retail	3.3	3.6	8%	17.6	12.3	(30%)
Crop Care	1.2	(2.0)	(273%)	28.4	22.5	(21%)
Corporate & Intercompany elim.	(5.6)	(6.7)		(37.3)	(31.6)

Adjusted EBITDA Margin %	0.9%	(0.8%)	-170 bps	8.3%	2.8%	-550 bps
Adjusted EBITDA Margin (% of Inputs)	1.1%	(1.1%)	-210 bps	9.0%	3.2%	-580 bps

Share of profit of an associate	–	0.1		–	0.3
D&A (incl. PPA amortization)	(8.3)	(8.9)	7%	(32.3)	(36.0)	11%
Finance income (costs)	(28.2)	(50.3)	79%	(119.5)	(163.8)	37%
Income taxes, current and deferred	20.6	(14.3)		34.1	6.2
Net profit (loss)	(19.5)	(77.3)	n.m.	(43.7)	(154.6)	n.m.
(+) Adjustment items	6.6	1.6		81.2	14.6
(+) Income tax impact of adjustments	(2.2)	(0.5)		(6.7)	(5.0)
Adjusted net profit (loss)	(15.2)	(76.2)	403%	30.9	(144.9)	n.m.

Consolidated Results (BRL)	4Q23	4Q24	Chg. %	FY23	FY24	Chg. %
(in millions of Brazilian reais)

Revenue by Segment	1,315.1	1,414.6	8%	9,347.4	9,392.3	0%
Brazil Ag Retail	976.4	1,004.2	3%	7,829.3	7,869.8	1%
Latam Ag Retail	306.2	339.9	11%	1,206.3	1,190.5	(1%)
Crop Care	52.7	103.9	97%	632.8	749.2	18%
Intercompany eliminations	(20.2)	(33.5)		(321.1)	(417.3)

Revenue by Category	1,315.1	1,414.6	8%	9,347.4	9,392.3	0%
Inputs revenue	1,074.5	1,058.5	(1%)	8,680.5	8,337.9	(4%)
Grains revenue	240.5	356.1	48%	666.9	1,054.4	58%

Gross Profit	232.1	235.7	2%	1,730.8	1,337.5	(23%)
Brazil Ag Retail	130.3	155.2	19%	1,286.0	910.2	(29%)
Latam Ag Retail	46.6	54.2	16%	196.6	184.2	(6%)
Crop Care	40.0	30.0	(25%)	280.9	278.4	(1%)
Intercompany elim.	15.1	(3.7)		(32.7)	(35.3)

Gross Margin	17.6%	16.7%	-100 bps	18.5%	14.2%	-430 bps
Brazil Ag Retail	13.3%	15.5%	210 bps	16.4%	11.6%	-490 bps
Latam Ag Retail	15.2%	15.9%	70 bps	16.3%	15.5%	-80 bps
Crop Care	75.9%	28.9%	-4700 bps	44.4%	37.2%	-720 bps

Gross Margin (% of Inputs revenue)	21.6%	22.3%	70 bps	19.9%	16.0%	-390 bps
Brazil Ag Retail	17.7%	23.8%	610 bps	17.9%	13.3%	-460 bps
Latam Ag Retail	15.3%	16.1%	80 bps	16.8%	16.0%	-70 bps
Crop Care	75.9%	28.9%	-4700 bps	44.4%	37.2%	-720 bps

SG&A (excl. D&A)	(274.6)	(268.5)	(2%)	(1,060.6)	(1,184.6)	12%
Other operating income (expense)	24.7	13.7		(275.8)	37.6
EBITDA	(17.8)	(19.1)	n.m.	394.4	190.4	(52%)
(+) Adjustment items	29.5	7.9		393.5	72.8
Adjusted EBITDA	11.7	(11.2)	(195%)	787.9	263.2	(67%)
Brazil Ag Retail	16.9	15.4	(9%)	741.3	248.5	(66%)
Latam Ag Retail	16.5	18.8	14%	91.6	61.8	(32%)
Crop Care	5.8	(10.6)	(282%)	149.0	110.7	(26%)
Corporate & Intercompany elim.	(27.5)	(34.8)		(193.9)	(157.8)

Adjusted EBITDA Margin %	0.9%	(0.8%)	-170 bps	8.4%	2.8%	-560 bps
Adjusted EBITDA Margin (% of Inputs)	1.1%	(1.1%)	-210 bps	9.1%	3.2%	-590 bps

Share of profit of an associate	–	(0.3)		–	1.5
D&A (incl. PPA amortization)	(41.3)	(46.6)	13%	(167.5)	(180.0)	7%
Finance income (costs)	(139.5)	(262.7)	88%	(617.8)	(822.5)	33%
Income taxes, current and deferred	102.0	(74.6)		172.3	25.6
Net profit (loss)	(96.6)	(403.3)	n.m.	(218.7)	(785.0)	n.m.
(+) Adjustment items	32.6	8.5		420.5	72.3
(+) Income tax impact of adjustments	(11.1)	(2.9)		(34.3)	(24.6)
Adjusted net profit (loss)	(75.0)	(397.7)	430%	167.5	(737.3)	n.m.

FY4Q24 Segment Results

Please note for the FY2024 and FY4Q24 results, Lavoro management updated its methods of allocation of certain holding company expenses between operating segments and “Corporate”. These corporate expenses incurred by the holding company and not directly related to any operating segment were previously attributed to Brazil Ag Retail and Crop Care operating segments. They have now been reclassified under “Corporate” to better align with management’s assessment framework and reflect each business unit’s underlying performance. Supplementary financial information reflecting past results with this updated methodology is available on our investors relations website https://ir.lavoroagro.com.

Brazil Ag Retail

Brazil Ag Retail segment revenue decreased by -2% (+3% in BRL) to $192.5 million in 4Q24, with growth in Grains revenue resulting from a higher mix of barter operations being offset by a decline in Inputs revenue and the impact of converting our results from BRL to USD.

Inputs revenue declined -16% to $124.8 million (-12% in BRL), reflecting in part Lavoro’s decision to delay shipments to certain farmer clients with outstanding overdue receivables until repayment, as was discussed in the prior quarter earnings call.

Gross profit grew +13% to $29.8 million (+19% in BRL), as gross margin expanded by 210 bps y/y to 15.5% in 4Q24, and Gross Margin (Inputs) increased by 610 bps to 23.8%. The margin improved was driven mainly by the increase in supplier rebates compared to prior year.

Adjusted EBITDA was $3.0 million, compared to $3.4 million in the prior year quarter, with higher operating expenses off.

Brazil Ag Retail (USD)	4Q23	4Q24	Chg. %	FY23	FY24	Chg. %
(in millions of US dollars)

Inputs revenue	148.7	124.8	(16%)	1,382.2	1,382.9	0%
Grains revenue	48.5	67.7	40%	124.0	201.6	63%
Revenue	197.2	192.5	(2%)	1,506.2	1,584.4	5%

Gross Profit	26.3	29.8	13%	246.8	182.7	(26%)
Gross Margin	13.3%	15.5%	210 bps	16.4%	11.5%	-490 bps
Gross Margin (% of Inputs)	17.7%	23.8%	610 bps	17.9%	13.2%	-460 bps

Adjusted EBITDA	3.4	3.0	(13%)	141.6	50.1	(65%)
Adjusted EBITDA margin	1.7%	1.5%	-20 bps	9.4%	3.2%	-620 bps
Adjusted EBITDA margin (% of Inputs)	2.3%	2.4%	10 bps	10.2%	3.6%	-660 bps

Brazil Ag Retail (BRL)	4Q23	4Q24	Chg. %	FY23	FY24	Chg. %
(in millions of Brazilian reais)

Inputs revenue	736.4	651.0	(12%)	7,195.7	6,856.5	(5%)
Grains revenue	240.1	353.2	47%	633.6	1,013.3	60%
Revenue	976.4	1,004.2	3%	7,829.3	7,869.8	1%

Gross Profit	130.3	155.2	19%	1,286.0	910.2	(29%)
Gross Margin	13.3%	15.5%	210 bps	16.4%	11.6%	-490 bps
Gross Margin (% of Inputs)	17.7%	23.8%	610 bps	17.9%	13.3%	-460 bps

Adjusted EBITDA	16.9	15.4	(9%)	741.3	248.5	(66%)
Adjusted EBITDA margin	1.7%	1.5%	-20 bps	9.5%	3.2%	-630 bps
Adjusted EBITDA margin (% of Inputs)	2.3%	2.4%	10 bps	10.3%	3.6%	-670 bps

Brazil Ag Retail KPIs	4Q23	4Q24

Retail stores	181	187
Number of RTVs	827	832

Latam Ag Retail

Latam Ag Retail segment saw a 5% increase in revenue to $65.2 million (+11% in BRL), with the positive effect of the appreciation of the Colombian peso compared to USD and BRL in the prior year quarter more than offsetting headwinds from El Nino related droughts on planting intentions of Colombian farmers.

Segment gross profit was $10.4 million in 4Q24, an increase of +10% over the prior year period. Gross margins expanded by +70 bps to 15.9%, driven mainly by a favorable shift in product mix.

Adjusted EBITDA was $3.6 million, compared to $3.3 million in the prior year quarter, with the increase in gross profit partially offset by an increase in allowance for expected credit losses.

Latam Ag Retail (USD)	4Q23	4Q24	Chg. %	FY23	FY24	Chg. %
(in millions of US dollars)

Inputs & services revenue	61.7	64.6	5%	227.4	229.5	1%
Grains revenue	0.1	0.5	483%	6.4	8.3	31%
Revenue	61.8	65.2	5%	233.8	237.8	2%

Gross Profit	9.4	10.4	10%	38.1	36.8	(3%)
Gross Margin	15.2%	15.9%	70 bps	16.3%	15.5%	-80 bps
Gross Margin (% of Inputs)	15.3%	16.1%	80 bps	16.7%	16.0%	-70 bps

Adjusted EBITDA	3.3	3.6	8%	17.6	12.3	(30%)
Adjusted EBITDA margin	5.4%	5.5%	20 bps	7.5%	5.2%	-230 bps

Latam Ag Retail (BRL)	4Q23	4Q24	Chg. %	FY23	FY24	Chg. %
(in millions of Brazilian reais)

Inputs & services revenue	305.7	337.1	10%	1,173.0	1,149.5	(2%)
Grains revenue	0.5	2.9	514%	33.4	41.0	23%
Revenue	306.2	339.9	11%	1,206.3	1,190.5	(1%)

Gross Profit	46.6	54.2	16%	196.6	184.2	(6%)
Gross Margin	15.2%	15.9%	70 bps	16.3%	15.5%	-80 bps
Gross Margin (% of Inputs)	15.3%	16.1%	80 bps	16.8%	16.0%	-70 bps

Adjusted EBITDA	16.5	18.8	14%	91.6	61.8	(32%)
Adjusted EBITDA margin	5.4%	5.5%	20 bps	7.6%	5.2%	-240 bps

Latam Ag Retail KPIs	4Q23	4Q24

Retail stores	39	36
Number of RTVs	262	263

Crop Care

Crop Care revenue increased by 87% to $19.9 million in 4Q24 (+97% in BRL), led by the strong performance of Union Agro, our specialty fertilizer business, which grew revenue by 46% in the quarter, and of Perterra, our private label off-patent crop protection business, partially offset by lower sales of biopesticides.

Segment gross profit declined -29% y/y to $5.8 million (-25% in BRL), while gross margins decreased to 28.9%, from 75.9% in the prior year quarter. The decline in gross margins reflects the adverse product category mix, as Perterra grew considerably as compared to prior year, while 4Q23 benefited from an unusually strong mix of biological sales due to the timing of shipments.

Adjusted EBITDA was -$2.0 million in 4Q24, compared to Adjusted EBITDA of $1.2 million in the prior year period, with the decrease driven by the decline in gross profit.

Crop Care (USD)	4Q23	4Q24	Chg. %	FY23	FY24	Chg. %
(in millions of US dollars)

Revenue	10.7	19.9	87%	121.2	150.7	24%

Gross Profit	8.1	5.8	(29%)	54.0	56.1	4%
Gross Margin	75.9%	28.9%	-4700 bps	44.6%	37.2%	-730 bps

Adjusted EBITDA	1.2	(2.0)	(273%)	28.4	22.5	(21%)
Adjusted EBITDA margin	11.1%	(10.2%)	-2130 bps	23.4%	15.0%	-850 bps

Crop Care (BRL)	4Q23	4Q24	Chg. %	FY23	FY24	Chg. %
(in millions of Brazilian reais)

Revenue	52.7	103.9	97%	632.8	749.2	18%

Gross Profit	40.0	30.0	(25%)	280.9	278.4	(1%)
Gross Margin	75.9%	28.9%	-4700 bps	44.4%	37.2%	-720 bps

Adjusted EBITDA	5.8	(10.6)	(282%)	149.0	110.7	(26%)
Adjusted EBITDA margin	11.1%	(10.2%)	-2130 bps	23.5%	14.8%	-880 bps

Full Fiscal Year 2025 Consolidated Outlook⁶

We expect Brazil’s Ag inputs retail market to decline by roughly -10% in FY2025, with low-single digits volume growth offset by price declines stemming from base effects.

Lavoro’ FY2025 outlook is for consolidated revenue between R$8.60 billion and R$9.20 billion, and Inputs revenue between R$7.70 billion and R$8.30 billion. Adjusted EBITDA is expected to grow relative to FY2024.

On a USD basis, consolidated revenue is projected to range between $1.50 billion and $1.60 billion, consolidated Inputs revenue is expected to range from $1.35 billion to $1.45 billion, and Adjusted EBITDA is expected to grow relative to FY2024.

	BRL	USD

Revenue	R$8.60 billion to R$9.20 billion	US$1.50 billion to US$1.60 billion
Inputs revenue	R$7.70 billion to R$8.30 billion	US$1.35 billion to US$1.45 billion
Adjusted EBITDA	Growth compared to FY2024	Growth compared to FY2024

__________________________

⁶ USD/BRL average period exchange rate embedded in our financial outlook of 5.71, representing the period-weighted average FX rate fiscal year-to-date and the latest spot rate of 5.78 as of October 30, 2024.

Conference Call Details

Lavoro management will host a conference call and audio webcast on November 1, 2024 at 8:30 a.m. ET (9:30 a.m. BRT) to discuss the financial results.

Participant numbers: 1-877-407-9716 (U.S.), 1-201-493-6779 (International)

The live audio webcast will be accessible in the Events section on the Company’s Investor Relations website at https://ir.lavoroagro.com/disclosure-and-documents/events/.

Non-IFRS Financial Measures

This press release contains certain non-IFRS financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Profit/Loss and Adjusted Net Profit/Loss Margin. A non-IFRS financial measure is generally defined as a numerical measure of historical or future financial performance, financial position, or cash flow that purports to measure financial performance but excludes or includes amounts that would not be so adjusted in the most comparable IFRS measure. The Company believes these non-IFRS financial measures provide meaningful supplemental information as they are used by the Company’s management to evaluate the Company’s performance, and provide additional information about trends in our operating performance prior to considering the impact of capital structure, depreciation, amortization and taxation on our results, as well as the effects of certain items or events that vary widely among similar companies, and therefore may hamper comparability across periods, although these measures are not explicitly defined under IFRS. Management believes that these measures enhance a reader’s understanding of the operating and financial performance of the Company and facilitate a better comparison between fiscal periods.

Adjusted EBITDA is defined as profit (loss), adjusted for net finance income (costs), income taxes, depreciation and amortization. We also adjust this measure for certain revenues or expenses that are excluded when management evaluates the performance of our day-to-day operations, namely: (i) share of profit of an associate; (ii) fair value on inventories sold from acquired companies, a non-cash expense resulting from purchase price allocation of past acquisitions; (iii) M&A expenses that in management’s judgment do not necessarily occur on a regular basis; (iv) gains on bargain purchases, which are also related to purchase price allocation of past acquisitions; (v) listing and other expenses recognized in connection with the Business Combination; (vi) share-based compensation expenses; (vii) one-off bonuses paid out to our employees as a result of the closing of the Business Combination; and (viii) related-party expenses paid to Patria in connection to management support services. Adjusted EBITDA Margin is calculated as Adjusted EBITDA as a percentage of revenue for the period/year.

Adjusted Net Profit/Loss is defined as profit (loss) adjusted for certain revenues or expenses that are excluded when management evaluates the performance of our day-to-day operations, namely: (i) share of profit of an associate; (ii) fair value on inventories sold from acquired companies, a non-cash expense resulting from purchase price allocation of past acquisitions; (iii) M&A expenses that in management’s judgment do not necessarily occur on a regular basis; (iv) gains on bargain purchases, which are also related to purchase price allocation of past acquisitions; (v) listing and other expenses recognized in connection with the Business Combination; (vi) share-based compensation expenses; (vii) one-off bonuses paid out to our employees as a result of the closing of the Business Combination; and (viii) related-party expenses paid to Patria in connection to management support services. Adjusted Net Profit/Loss Margin is calculated as Adjusted Net Profit/Loss as a percentage of revenue for the period/year.

The Company does not intend for the non-IFRS financial measures contained in this release to be a substitute for any IFRS financial information. Readers of this press release should use these non-IFRS financial measures only in conjunction with comparable IFRS financial measures. Reconciliations of the non-IFRS financial measures Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Profit/Loss and Adjusted Net Profit/Loss Margin, to their most comparable IFRS measures, are provided in the table below.

Reconciliation of Adjusted EBITDA

	Results in USD
	(in millions of US dollars)

Consolidated Results	4Q23	4Q24	FY23	FY24
(in millions of US dollars)

Net profit (loss)	(19.5)	(77.1)	(43.7)	(154.6)
(+) Income taxes	(20.6)	14.3	(34.1)	(6.2)
(+) Finance income (costs)	28.2	50.3	119.5	163.8
(+) Depreciation and amortization	8.3	8.9	32.3	36.0
(+) Share of profit of an associate	–	(0.1)	–	(0.3)
(+) M&A expenses	0.8	0.2	2.2	4.4
(+) Stock-based compensation	0.5	0.4	2.8	3.2
(+) DeSPAC related bonus	0.9	0.1	5.8	3.6
(+) Related party consultancy services	3.8	0.8	3.8	3.5
(+) Nasdaq listing expenses	–		61.5
Adjusted EBITDA	2.4	(2.1)	150.1	53.4

Brazil Ag Retail	4Q23	4Q24	FY23	FY24
(in millions of US dollars)

Net profit (loss)	1.1	(62.7)	52.5	(118.1)
(+) Income taxes	(21.0)	13.2	(41.0)	(8.8)
(+) Finance income (costs)	16.5	46.5	101.2	151.3
(+) Depreciation and amortization	6.1	6.4	23.6	25.0
(+) Share of profit of an associate	–	(0.4)	–	(0.5)
(+) DeSPAC related bonus	0.8	–	5.3	1.3
Adjusted EBITDA	3.4	3.0	141.6	50.1

Latam Ag Retail	4Q23	4Q24	FY23	FY24
(in millions of US dollars)

Net profit (loss)	0.8	0.8	7.0	2.2
(+) Income taxes	0.7	0.1	4.3	1.7
(+) Finance income (costs)	0.8	1.8	3.0	5.3
(+) Depreciation and amortization	0.7	0.6	2.2	2.3
(+) M&A expenses	0.2	0.3	0.6	0.3
(+) DeSPAC related bonus	0.1	–	0.5	0.6
Adjusted EBITDA	3.3	3.6	17.6	12.3

Crop Care	4Q23	4Q24	FY23	FY24
(in millions of US dollars)

Net profit (loss)	(4.4)	(7.3)	10.8	3.2
(+) Income taxes	(1.3)	1.0	4.7	3.1
(+) Finance income (costs)	5.6	2.9	9.6	11.4
(+) Depreciation and amortization	0.9	0.9	2.6	4.1
(+) Share of profit of an associate	–	0.4	–	0.1
(+) M&A expenses	0.1	0.0	0.1	0.1
(+) Stock-based compensation	0.1	0.1	0.4	0.3
(+) DeSPAC related bonus	–	–	–	–
(+) Related party consultancy services	0.2	–	0.2	0.3
Adjusted EBITDA	1.2	(2.0)	28.4	22.5

Corporate & Intercompany Elim.	4Q23	4Q24	FY23	FY24
(in millions of US dollars)

Net profit (loss)	(17.1)	(8.0)	(113.9)	(41.9)
(+) Income taxes	1.0	–	(2.0)	(2.2)
(+) Finance income (costs)	5.3	(0.9)	5.8	(4.2)
(+) Depreciation and amortization	0.6	1.1	3.9	4.7
(+) Share of profit of an associate	–	0.1	–	0.1
(+) M&A expenses	0.5	(0.2)	1.4	4.0
(+) Stock-based compensation	0.4	0.3	2.4	2.9
(+) DeSPAC related bonus	–	0.1	–	1.8
(+) Related party consultancy services	3.6	0.8	3.6	3.2
(+) Nasdaq listing expenses	–	–	61.5	–
Adjusted EBITDA	(5.6)	(6.7)	(37.3)	(31.6)

	Results in BRL
	(in millions of Brazilian reais)

Consolidated Results	4Q23	4Q24	FY23	FY24
(in millions of Brazilian reais)

Net profit (loss)	(96.6)	(403.3)	(218.7)	(785.0)
(+) Income taxes	(102.0)	74.6	(172.3)	(25.6)
(+) Finance income (costs)	139.5	262.7	617.8	822.5
(+) Depreciation and amortization	41.3	46.6	167.5	180.0
(+) Share of profit of an associate	–	0.3	–	(1.5)
(+) M&A expenses	3.9	1.0	11.0	21.7
(+) Stock-based compensation	2.6	2.2	14.5	15.6
(+) DeSPAC related bonus	4.3	0.4	29.7	18.0
(+) Related party consultancy services	18.7	4.3	18.7	17.5
(+) Nasdaq listing expenses	–		319.6	–
Adjusted EBITDA	11.7	(11.2)	787.9	263.2

Brazil Ag Retail	4Q23	4Q24	FY23	FY24
(in millions of Brazilian reais)

Net profit (loss)	5.6	(327.3)	275.5	(600.9)
(+) Income taxes	(104.2)	68.8	(208.3)	(39.1)
(+) Finance income (costs)	81.5	242.7	525.1	760.0
(+) Depreciation and amortization	30.1	33.3	122.0	124.9
(+) Share of profit of an associate	–	(2.0)	–	(2.8)
(+) DeSPAC related bonus	3.8	–	27.1	6.3
Adjusted EBITDA	16.9	15.4	741.3	248.5

Latam Ag Retail	4Q23	4Q24	FY23	FY24
(in millions of Brazilian reais)

Net profit (loss)	4.0	3.9	36.4	10.9
(+) Income taxes	3.5	0.7	22.3	8.3
(+) Finance income (costs)	4.1	9.4	15.4	26.5
(+) Depreciation and amortization	3.5	3.0	11.8	11.3
(+) M&A expenses	0.9	1.7	3.1	1.7
(+) DeSPAC related bonus	0.5	–	2.6	3.0
Adjusted EBITDA	16.5	18.8	91.6	61.8

Crop Care	4Q23	4Q24	FY23	FY24
(in millions of Brazilian reais)

Net profit (loss)	(21.7)	(38.2)	58.3	13.6
(+) Income taxes	(6.5)	5.1	24.9	15.8
(+) Finance income (costs)	27.6	15.4	48.4	57.1
(+) Depreciation and amortization	4.5	4.4	13.6	20.4
(+) Share of profit of an associate	–	1.9	–	0.6
(+) M&A expenses	0.3	0.2	0.7	0.4
(+) Stock-based compensation	0.5	0.4	2.0	1.3
(+) DeSPAC related bonus	–	–	–	–
(+) Related party consultancy services	1.1	0.2	1.1	1.5
Adjusted EBITDA	5.8	(10.6)	149.0	110.7

Corporate & Intercompany Elim.	4Q23	4Q24	FY23	FY24
(in millions of Brazilian reais)

Net profit (loss)	(84.6)	(41.7)	(588.8)	(208.6)
(+) Income taxes	5.1	0.0	(11.1)	(10.7)
(+) Finance income (costs)	26.3	(4.8)	29.0	(21.1)
(+) Depreciation and amortization	3.2	5.8	20.2	23.3
(+) Share of profit of an associate	–	0.5	–	0.7
(+) M&A expenses	2.7	(0.9)	7.3	19.5
(+) Stock-based compensation	2.1	1.8	12.5	14.4
(+) DeSPAC related bonus	–	0.4	–	8.7
(+) Related party consultancy services	17.6	4.2	17.6	16.0
(+) Nasdaq listing expenses	–	–	319.6	–
Adjusted EBITDA	(27.5)	(34.8)	(193.9)	(157.8)

Reconciliation of Adjusted Net Profit (Loss)

	USD (in millions of US dollars)

Consolidated Results	4Q23	4Q24	FY23	FY24

Net profit (loss)	(19.5)	(77.3)	(43.7)	(154.6)
(+) FV of inventories from acquired companies	0.6	–	5.2	0.2
(+) Share of profit of an associate	–	0.1	–	(0.3)
(+) M&A expenses	0.8	0.2	2.2	4.4
(+) Stock-based compensation	0.5	0.4	2.8	3.2
(+) DeSPAC related bonus	0.9	0.1	5.8	3.6
(+) Related party consultancy services	3.8	0.8	3.8	3.5
(+) Nasdaq listing expenses	–	–	61.5	–
(+) Tax impact of adjustments	(2.2)	(0.6)	(6.7)	(5.0)
Adjusted net profit (loss)	(15.2)	(76.2)	30.9	(144.9)

	BRL (in millions of Brazilian reais)

Consolidated Results	4Q23	4Q24	FY23	FY24

Net profit (loss)	(96.6)	(403.3)	(218.7)	(785.0)
(+) FV of inventories from acquired companies	3.1	0.3	26.9	1.0
(+) Share of profit of an associate	–	0.3	–	(1.5)
(+) M&A expenses	3.9	1.0	11.0	21.7
(+) Stock-based compensation	2.6	2.2	14.5	15.6
(+) DeSPAC related bonus	4.3	0.4	29.7	18.0
(+) Related party consultancy services	18.7	4.3	18.7	17.5
(+) Nasdaq listing expenses	–	–	319.6	–
(+) Tax impact of adjustments	(11.1)	(2.5)	(34.3)	(24.6)
Adjusted net profit (loss)	(75.0)	(397.3)	167.5	(737.3)

About Lavoro

Lavoro is Brazil’s largest agricultural inputs retailer and a leading producer of agricultural biological products. Lavoro’s shares and warrants are listed on the Nasdaq stock exchange under the tickers “LVRO” and “LVROW.” Through its comprehensive portfolio of products and services, the company empowers small and medium-size farmers to adopt the latest emerging agricultural technologies and enhance their productivity. Since its founding in 2017, Lavoro has broadened its reach across Latin America, serving 72,000 customers in Brazil, Colombia, and Uruguay, via its team of over 1,000 technical sales representatives (RTVs), its network of over 210 retail locations, and its digital marketplace and solutions. Lavoro’s RTVs are local trusted advisors to farmers, regularly meeting them to provide agronomic recommendations throughout the crop cycle to drive optimized outcomes. Learn more about Lavoro at ir.lavoroagro.com.

Reportable Segments

Lavoro’s reportable segments are the following:

Brazil Ag Retail: comprises companies dedicated to the distribution of agricultural inputs such as crop protection, seeds, fertilizers, and specialty products, in Brazil.

Latam Ag Retail: includes companies dedicated to the distribution of agricultural inputs outside Brazil (currently primarily in Colombia).

Crop Care: includes companies that manufacture and distribute our own portfolio of private label specialty products (i.e., biologicals, adjuvants, specialty fertilizers, and other specialty products), and import and distribute off-patent crop protection products.

Lavoro’s Fiscal Year

Lavoro follows the crop year, which means that its fiscal year comprises July 1^st of each year, until June 30 of the following year. Given this, Lavoro’s quarters have the following format:

1Q – quarter starting on July 1 and ending on September 30.
2Q – quarter starting on October 1 and ending on December 31.
3Q – quarter starting on January 1 and ending on March 31.
4Q – quarter starting on April 1 and ending on June 30.

Definitions

RTVs: refer to Lavoro’s technical sales representatives (Representante Técnico de Vendas), who are linked to its retail stores, and who develop commercial relationships with farmers.

Forward-Looking Statements

The contents of any website mentioned or hyperlinked in this press release are for informational purposes and the contents thereof are not part of or incorporated into this press release.
Certain statements made in this press release are “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “aims,” “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the expectations regarding the growth of Lavoro’s business and its ability to realize expected results, grow revenue from existing customers, and consummate acquisitions; opportunities, trends, and developments in the agricultural input industry, including with respect to future financial performance in the industry. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by any investor as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Lavoro.

These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to, the outcome of any legal proceedings that may be instituted against Lavoro related to the business combination agreement or the transaction; the ability to maintain the listing of Lavoro’s securities on Nasdaq; the price of Lavoro’s securities may be volatile due to a variety of factors, including changes in the competitive and regulated industries in which Lavoro operates, variations in operating performance across competitors, changes in laws and regulations affecting Lavoro’s business; Lavoro’s inability to meet or exceed its financial projections and changes in the consolidated capital structure; changes in general economic conditions; the ability to implement business plans, forecasts, and other expectations, changes in domestic and foreign business, market, financial, political and legal conditions; the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; costs related to being a public company and other risks and uncertainties indicated from time to time in the Annual Report on Form 20-F filed by Lavoro or in the future, including those under “Risk Factors” therein, or Lavoro’s other filings with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Lavoro currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements.

In addition, forward-looking statements reflect Lavoro’s expectations, plans, or forecasts of future events and views as of the date of this press release. Lavoro anticipates that subsequent events and developments will cause Lavoro’s assessments to change. However, while Lavoro may elect to update these forward-looking statements at some point in the future, Lavoro specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Lavoro’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Financial Statements

Detailed financial statements provided on Form 6-K as filed with the SEC can be accessed on the Company’s investor relations website at https://ir.lavoroagro.com/disclosure-and-documents/sec-filings/.

Contact

Julian Garrido
julian.garrido@lavoroagro.com

Tigran Karapetian
tigran.karapetian@lavoroagro.com

Fernanda Rosa
fernanda.rosa@lavoroagro.com

Earnings News

CCR – Results for the 3rd quarter of 2024

01.11.2024 by admin

SÃO PAULO, Oct. 31, 2024 /PRNewswire/ —

Highlights

The Company announced the extension of Renovias’ term until April 13, 2026. Further details can be found in the regulatory matters section.
Record traffic in all platforms, with growths of 4.4% in toll roads, 5.1% in urban mobility, and 8.8% in airports.
CCR announced that will start the payment of dividends, totaling R$ 304 million, on November 29, 2024.
CCR won the auction for the Sorocabana Route. The fixed grant amount offered was R$1.6 billion.

Consolidated Operational and Financial Highlights

OPERATIONAL AND FINANCIAL HIGHLIGHTS (R$ MM)	3Q23	3Q24	Var.%	9M23	9M24	Var.%
Consolidated Adjusted Net Revenue¹	3,416	3,782	10.7 %	9,745	10,748	10.3 %
Consolidated Adjusted EBITDA¹	2,122	2,190	3.2 %	5,853	6,265	7.0 %
Adjusted EBITDA – Toll Roads	1,549	1,621	4.6 %	4,375	4,653	6.4 %
Adjusted EBITDA – Mobility	552	571	3.5 %	1,422	1,561	9.8 %
Adjusted EBITDA – Airports	235	274	16.5 %	632	793	25.4 %
Adjusted EBITDA – Others	(214)	(276)	28.8 %	(575)	(742)	29.0 %
Consolidated Adjusted EBITDA Margin²	62.1 %	57.9 %	-4.2 p.p.	60.1 %	58.3 %	-1.8 p.p.
Adjusted Net Income¹	502	560	11.7 %	1,022	1,420	38.9 %
Net Debt/LTM Adjusted EBITDA (x)	2.9	3.1	0.2 p.p.	2.9	3.1	0.2 p.p.
Toll Roads – Equivalent Vehicles (million)	300.9	314.0	4.4 %	869.3	909.6	4.6 %
Mobility – Transported Passengers (million)	184.3	193.6	5.1 %	529.2	560.6	5.9 %
Airports – Boarded Passengers (million)	4.8	5.2	8.8 %	13.5	14.6	8.4 %
CAPEX³	1,331	2,101	57.9 %	4,190	4,982	18.9 %

Excludes construction revenue and expenses. Adjustments are described in the “non-recurring effects” section in Exhibit I.
The Adjusted EBITDA Margin was calculated by dividing Adjusted EBITDA by Adjusted Net Revenue.
Includes improvement works that do not generate future economic benefits for ViaOeste.

Videoconference

Conference call in Portuguese with simultaneous translation into English:
November 1st, 2024
10:00 a.m. São Paulo / 09:00 a.m. New York
Videoconference link:
https://grupoccr-br.zoom.us/webinar/register/WN_BwhScwe7RiiCHKDSZ1znTg

IR Contacts

Flávia Godoy: (+55 11) 3048-5900 – flavia.godoy@grupoccr.com.br
Douglas Ribeiro: (+55 11) 3048-5900 – douglas.ribeiro@grupoccr.com.br
Cauê Cunha: (+55 11) 3048-5900 – caue.cunha@grupoccr.com.br
Igor Yamamoto: (+55 11) 3048-5900 – igor.yamamoto@grupoccr.com.br
Caique Moraes: (+55 11) 3048-5900 – caique.moraes@grupoccr.com.br

View original content:https://www.prnewswire.com/news-releases/ccr—results-for-the-3rd-quarter-of-2024-302293552.html

SOURCE CCR S.A.

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