Cogeco faces losses in Portugal

Cogeco Cable Inc. said Thursday that it is writing off its Cabovisao assets in Portugal for the third quarter of 2011 as a result of the European economic crisis. The company said it is focused on keeping its subscribers in Portugal as opposed to growing them. “To curtail its deficit, the Portuguese government has increased the income and sales tax rates, reduced its spending on social programs, which were necessary to reform the economy. As a result, there is a downward pressure on customer spending since there is less disposable income,” Louis Audet, president and CEO of Cogeco, said in a statement announcing the company's third quarter 2011 results for the period ending May 31. “For Cabovisao, this situation has translated into net customer losses and service downgrades by customers across all the services in the third quarter of fiscal 2011. Management considers that this situation, as evidenced by the customer losses, is more significant and persistent than expected, resulting in the write-off of Cogeco Cable's investment in the Portuguese subsidiary.” The company said that, during the quarter, Cogeco wrote-off its net investment in Cabovisao through a non-cash impairment loss in the amount of $225.9 million. The company said that in Portugal it faced “subscriber losses in the third quarter despite additional marketing initiatives designed to generate growth in the near term.” The company predicted an $85 million loss for its cable assets and an overall company loss of $20 million during the 2011 fiscal year. Despite the troubles in Portugal, the company grew subscribers by 41,819 net additions during the third quarter and by 189,767 net additions in the first nine months of 2011, reaching a total of 3,369,116 subscribers as of May 31, 2011, a release said. Cogeco operates cable systems in Quebec, Ontario, and Portugal.

Cogeco faces losses in Portugal

Brief | July 7, 2011

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