Corus takes second-quarter hit, will miss targets

TORONTO — Corus Entertainment Inc. said Thursday it had an $86.8-million net loss in its second quarter, mostly because of a writedown of the value of some of its assets and because it didn’t see an expected improvement in advertiser confidence.

The company — which has one of Canada’s largest collections of specialty television channels and radio stations such as Vancouver’s CFOX and CKNW 980AM — said that it won’t meet one of the targets provided to investors in November, when it expected advertising demand would improve.

Corus said it was hit during the December-February quarter with “further economic headwinds” that affected advertising market confidence. It listed a number of factors including a weaker Canadian dollar since Jan. 1, continued low oil prices and the closure of large retail stores such as Target Canada, which announced in January it would close all its stores.

“In summary, the company does not expect to achieve the low end of the segment profit guidance for the fiscal year (ending Aug. 31); however, free cash flow guidance remains unchanged,” Corus said in its report to shareholders.

The Toronto-based company said its overall revenue during the quarter ended Feb. 28 was about the same as a year ago, with a decline in its radio segment offsetting an improvement at its television segment.

Total revenue was $191.48 million, compared with $191.41 million a year before. Television revenue was $155.2 million, up from $152.1 million, while radio revenue dropped to $36.3 million from $39.3 million. The secondquarter loss amounted to $1.01 per share and compared with a profit of seven cents per share or $6.1 million in the second quarter of 2014.

Much of the loss was due to a total of $130 million in writedowns of the value of goodwill — an asset related to past acquisitions — and its radio licences.

“For the second quarter, certain radio clusters had actual results and revised cash flow projections that fell short of previous estimates, which indicated that interim broadcast licence and goodwill impairment testing was required in the radio segment,” the company said in a report to shareholders.

Excluding the writedowns, restructuring costs and an investment gain, Corus had $28.5 million of adjusted net income, or 33 cents per share, up slightly from $26.8 million or 32 cents per share in the second quarter of the 2014 financial year.