MONTREAL — Cogeco Inc.'s Quebec-based radio business has temporarily laid off about one-quarter of its employees due to a significant decline in advertising from retailers affected by COVID-19 shutdowns.
Cogeco's radio stations have maintained good ratings during the pandemic by providing news, information and music during the crisis, chief executive Philippe Jette told analysts Wednesday.
But he added those ratings aren't expected to translate into revenue in the short term because most of the advertising that supports Cogeco's 23 radio stations across Quebec is from retailers affected by the pandemic, which was declared officially in March.
"Cogeco Media has transformed its radio programming to provide Quebecers with quality and continuous information related to the current situation, while still offering musical programming," Jette said.
Although the length and severity of the advertising downturn are unknown, he said, "we do expect to be in a strong position, from a market share perspective, when the situation eventually gets back to normal."
The number of employees affected by the layoffs wasn't immediately available.
Jette said the overall company, which derives only four per cent of its revenue from media, is in good financial shape.
Cogeco Communications — a subsidiary that provides internet, video and telephony services — had about $500 million of cash on hand and $948 million in unused credit facilities when its second quarter ended Feb. 29.
Jette says Cogeco Communications has adjusted its spending priorities as many of its employees work from home or provide customer technical support by video.
Patrice Ouimet, Cogeco's chief financial officer, said customer self-installations are more necessary because of social distancing to combat the spread of COVID-19.
"And a lot of customers that would prefer not (to see) a technician coming into the house. So that makes a lot of sense," Ouimet said.
Cogeco has also introduced new tools for customers to do remote repairs with video instruction "which is something we're planning to keep going forward."
He added that Cogeco — which can offer internet speeds of 120 megabits per second and sometimes as fast as one gigabit per second — has picked up customers from rivals with slower maximum speeds.
"We have seen increased loads throughout the day," Ouimet said.
"Not only do people want to be entertained in the evening, now they want to be entertained throughout the day . . . and there's a lot of business being done at home."
"And we all know that work never stops at home. It starts early in the morning and it goes all the way to the end of the evening."
— by David Paddon in Toronto
This report by The Canadian Press was first published April 8, 2020.
Companies in this story: (TSX:CGO, TSX:CCA)
The Canadian Press
