COVID-19 won’t have ‘very large impact’ on Cogeco: CFO

Cogeco Inc. chief financial officer Patrice Ouimet has told an investor conference that he doesn’t think COVID-19 will have a “very large” impact on its financials, and that the company is a “bit fortunate” to be based in North America rather than parts of the world impacted by the virus much earlier. Speaking remotely to financial analyst Maher Yaghi at Desjardins’ Industrial, TMT, Diversified and Consumer Conference, Ouimet said Cogeco had been “fairly busy in our management of this situation” for a couple of weeks and most of its employees are now working from home to prevent the spread of the virus. Technicians continue to visit customers’ houses, but more troubleshooting is being done remotely. The company has also the implemented special hygiene rules to stop the spread of the virus, Ouimet said. “I’m saying we’re a bit fortunate in North America to have seen this coming before, if we were in Asia or Europe I think things happened a bit quicker, so that gave us some time to get organised and do it,” Ouimet said. Making arrangements for the company’s call centre and radio operations employees had been a more complex task, Ouimet told the conference, but most would also be working from home by the end of the week. Ouimet said the increase in the amount of Canadians working from home meant the peak time for Cogeco’s network consumption had moved from the evening to during the day, but it had not created “a big issue” for Cogeco because the network was already provisioned for the demand. “We did make a few investments here and there to reinforce capacity in certain areas but it was not something major,” he said. Ouimet said the company was currently looking at the financial impact of the virus and would have more to say when it reported on its second quarter earnings, with an investor call currently scheduled for April 8. “Obviously we’re fortunately less touched than some other industries so that is the good news but there is probably going to be some impacts in different places,” he said. “I don’t think we’re gonna end up with very large impacts financially but this is something we’re looking at right now.” Overall, he said, “at the high level I’m not too worried, despite everything we’re doing it’s as usual, we’re keeping our customers up and running and the machine is going.” Moody’s Analytics on Tuesday listed telecoms as one of its industries classified as having “low exposure” to the global financial impacts of COVID-19, and said it could have a “potential positive impact” on internet service companies. In a quarterly earnings call on March 12, Quebecor Inc. CEO Karl-Pierre Péladeau said he did not expect the virus to have a “material financial impact” on the company. Canadian telecommunications providers have suspended internet overage charges, closed retail stores and offered free television channels in response to the virus. Asked by Yaghi about the government’s recent announcement of how it will implement its promise to see wireless prices drop 25 per cent, Ouimet said he was “not so surprised” by it because it was in line with what was promised during last year’s election campaign. He stated the mid-range plans the promise applied to affected just “one tranche of the population”, with many Canadians wanting bigger data allowances. Jetté said there was still room for Cogeco to enter the country’s wireless market if the CRTC endorsed its hybrid mobile network operator (HMNO) model that it had raised at last month’s wireless service review. Asked about the wireless review, Ouimet said it was “a good opportunity to launch a new product and get more of a share of wallet of our customers so they can actually stay with us.” “We have good brand reputation in the areas where we operate and some customers would benefit from having a fourth product with us,” he said. “If it does not work in the end we still have a good business right now but we see a definite opportunity to get into this business.” Telus Corp. and BCE Inc. were both scheduled to speak at the conference on Wednesday, but issued statements to The Wire Report on Tuesday saying they had cancelled their appearances because of COVID-19. A Quebecor spokesperson said chief financial officer Hughes Simard would still speak on Wednesday morning as scheduled. Correction: This story initially stated CEO Phillipe Jetté spoke at the conference, instead of Ouimet. — With reporting by Adam Langenberg at alangenberg@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

COVID-19 won’t have ‘very large impact’ on Cogeco: CFO

News | March 17, 2020

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