Torstar cuts dividend amid quarterly loss
Torstar Corp. saw its second-quarter loss swell as it incurred expenses related to its acquisition of VerticalScope last year and the closure of its printing plant in Vaughan this month.
On Wednesday Torstar, the parent company of newspapers including the Waterloo Region Record, Toronto Star and The Hamilton Spectator, reported a net loss of $23.9 million, which amounted to 30 cents per share. That’s up from a $1.1-million loss, or one cent per share, in last year’s second quarter.
The outlook for print advertising, which has steadily fallen, and the implications low interest rates could have on future pension funding also prompted the company to cut its dividend for the second time this year, president and CEO David Holland said in a conference call.
The quarterly payment will fall to 2.5 cents per share Sept. 30. The quarterly dividend had been 6.5 cents in June and March and 13.12 cents prior to that.
“There’s always a balance in terms of landing the dividend at the right rate and we thought this kind of was a good balance,” said Holland, who is retiring this fall.
Torstar also shed some light on Star Touch, an application for tablet computers it launched in September.
Between 55,000 and 60,000 readers access the app weekly, Holland said, with daily engagement ranging between 25 and 30 minutes.
“It’s not as quick off the mark as we would have liked, but we still believe that it could be an important part of our future.”
The company reaffirmed its expectation of breaking even on the app next year.
Overall revenue fell to $196.5 million from $216.9 million in the second quarter, though VerticalScope partly offset the decline. Revenue from digital ventures nearly doubled to $17.2 million from $9.7 million.
However, Torstar said the impact of lower print advertising and the costs associated with Star Touch exceeded contributions from VerticalScope and savings from cost-cutting measures, which included a reduction of 425 positions.
On July 3, the company stopped the presses at its printing plant in Vaughan and shifted that work to Transcontinental. The property and equipment are up for sale.