Postmedia posts profit despite pandemic

TORONTO • Postmedia Network Canada Corp.

saw revenue decline by more than 27 per cent or $ 40.4 million in its fiscal fourth quarter, but the media giant’s chief executive says he is cautiously optimistic that the worst of the damage wrought by COVID-19 may be over.

Results released Friday showed that there was an across-the-board hit to revenue streams at Postmedia, which owns National Post, Financial Post and numerous other properties across Canada, for the three months ended Aug. 31. Print advertising was down $ 22.1 million year- overyear, or 38.5 per cent, while digital revenue, an area of growth in recent years, was down 34.3 per cent — or $ 10.7 million. Operating revenue as a whole was $ 105.2 million, as compared to $ 145.6 million in the same period in 2019.

Despite the declines, the company posted net earnings of $13.5 million.

Postmedia president and chief executive Andrew Macleod said that he hopes the worst of COVID- 19’s devastating impact on the economy at large is past, and that there are signs that advertisers are beginning to come back.

“We think there is still more pain to come,” MacLeod said in an interview. “But our hope is it won’t be as severe, and acute, as it was in the February, March and April time-frame.”

Macleod thanked the federal government for its continued support through the Canada Emergency Wage Subsidy program, but noted that the material benefit to Postmedia, in terms of dollars and cents, will decrease as the economy comes back.

On an annualized basis, Postmedia revenue for the year ended Aug. 31 was $508.4 million as compared to $ 619.6 million in the same period a year ago, a decrease of $111.2 million or 18 per cent.

Despite revenue declines, media readership numbers remain strong. Macleod said the company’s long game of growing its digital revenues to a place where they are business- sustaining, while managing the decline of its legacy print business, remains unchanged.

What has been most encouraging, he said, is the increasing attention governments in the United States, Australia, France, the United Kingdom — and at home — are paying to tech giants such as Google parent Alphabet Inc. and Facebook Inc., which have come to dominate online advertising markets. “Addressing the dominant position of these players, that is something that is going to be critical to this industry’s future,” Macleod said.

The CEO stressed that, during a period where the trajectory of a global pandemic remains impossible to predict, the company will continue to play “defence” with its cost structures. In a bounce- back economic environment, Macleod added, the company would expect to hire people.