Tough year for Torstar Corp. as revenue challenges continue GABRIEL FRIEDMAN
Torstar Corp., owner of the Toronto Star and other Canadian newspapers, announced its fourth-quarter results on Wednesday, posting a $51.9-million net loss for the year as operating revenues slid nearly 12 per cent amid declines in print and digital advertising.
Revenue from subscriptions provided the lone major source of revenue growth during the year, up one per cent, as digital revenue in the category increased while print decreased.
For the fourth quarter, the Toronto-based company posted a $14.1-million profit, boosted by one-time gains from changes to its pension plan and the sale of properties in Ontario, but it made clear that it faces a challenging operating environment in which print advertising, still its largest source of revenue, is declining and “global technology giants” dominate the digital advertising sphere.
Looking forward, the company said that harnessing “data as a key asset” to grow digital subscriptions is central to its business strategy. In a nod to the significance of the challenges ahead, Torstar flagged a new risk, warning it is in danger of being delisted from the Toronto Stock Exchange (TSX) as a result of thin trading of its shares.
“The TSX has broad discretion regarding delisting,” the company said in its earnings release. “If the TSX determines that we no longer meet the applicable listing requirements, including with respect to the public distribution or liquidity of the Class B non-voting shares, there is a risk that the TSX may delist them.”
Torstar’s shares, which fell 6.8 per cent to close at 41 cents on Wednesday, have lost 58 per cent of their value over the past year.
Looking at all of 2019 compared to the previous year, print advertising fell 21 per cent to $155 million, digital advertising declined 8.1 per cent to $60.3 million, and flyer distribution revenue dipped 11 per cent to $103.5 million. Print and digital subscriptions rose one per cent to $119.7 million, but the company did not separate them out.