Post­media re­ports $13M profit

CEO God­frey says ef­forts for turn­around pay­ing off but cost-cut­ting isn’t over

Ottawa Citizen - - FRONT PAGE - CLAIRE BROWNELL

Post­media Net­work Canada Corp. on Fri­day re­ported a $13-mil­lion profit in the third quar­ter of 2017, with dig­i­tal ad­ver­tis­ing rev­enue in­creas­ing 22.8 per cent year over year.

The news­pa­per chain — which in­cludes the Na­tional Post and most of Canada’s ma­jor ur­ban dailies in­clud­ing the Ot­tawa Cit­i­zen and all Sun publi­ca­tions — is at­tempt­ing a turn­around in the midst of chal­leng­ing times for print me­dia as more and more peo­ple go on­line for news. Post­media in re­cent months has cut 20 per cent of its salary costs through buy­outs and lay­offs, which re­duced its work­force by about 800 peo­ple.

In an in­ter­nal memo to staff, Post­media chief ex­ec­u­tive Paul God­frey said the com­pany’s fo­cus on new ini­tia­tives to in­crease dig­i­tal rev­enue growth is pay­ing off. But he warned that the cost­cut­ting is not over.

“It is tremen­dously ex­cit­ing to find th­ese new ar­eas gain­ing trac­tion and con­tin­u­ing to build mo­men­tum, no doubt,” God­frey said. “But we also must con­tinue to trans­form in or­der to be a busi­ness that sup­ports and sus­tains a new busi­ness model.”

Those buy­outs and lay­offs, in ad­di­tion to cuts to ben­e­fit plans for em­ploy­ees, helped fuel Post­media’s quar­terly profit. In the third quar­ter of the pre­vi­ous year, the com­pany re­ported a $23.7 mil­lion loss.

In a con­fer­ence call with in­vestors Fri­day, God­frey said cost-cut­ting mea­sures un­der­taken to date in the 2017 fis­cal year are ex­pected to save an es­ti­mated $75 mil­lion an­nu­ally.

Print ad­ver­tis­ing and cir­cu­la­tion rev­enue, how­ever, con­tin­ued their long-stand­ing de­cline, con­tribut­ing to an 11.1-per-cent drop in to­tal rev­enue for the quar­ter. Rev­enue from print ad­ver­tis­ing de­creased by $22 mil­lion, or 19.1 per cent, while print cir­cu­la­tion rev­enue dropped by $5.5 mil­lion, or 8.5 per cent com­pared to the same pe­riod the pre­vi­ous year.

De­spite ef­forts to fo­cus on grow­ing dig­i­tal ad­ver­tis­ing, it re­mains a small part of Post­media’s over­all rev­enue, ac­count­ing for 4.9 per cent of to­tal rev­enue in the third quar­ter.

In June, the com­pany an­nounced plans to sell In­fo­mart, its me­dia mon­i­tor­ing and fi­nan­cial data di­vi­sion, for ap­prox­i­mately $38.25 mil­lion. The sale is ex­pected to close in Au­gust.

Post­media also an­nounced on Fri­day the ap­point­ment of a new ex­ec­u­tive vice pres­i­dent and chief fi­nan­cial of­fi­cer, Brian Bidulka. Bidulka was pre­vi­ously the chief fi­nan­cial of­fi­cer for Re­search In Mo­tion Ltd. — now known as Black­Berry Ltd. — and deputy chief fi­nan­cial of­fi­cer at Ge­orge We­ston Ltd.

In the in­vestor con­fer­ence call, God­frey said the com­pany’s em­ploy­ees should be proud of the progress made to­wards Post­media’s trans­for­ma­tion plan dur­ing the quar­ter.

“This has been a quar­ter where we’ve seen our new strate­gies tak­ing shape,” he said. “We con­tinue to be chal­lenged on the tra­di­tional rev­enue front. Our fo­cus on re­struc­tur­ing and cost sav­ings ini­tia­tives will con­tinue as we lean to­wards the new busi­ness model.” Post­media News

NATHAN DENETTE/THE CANA­DIAN PRESS

De­spite the de­cline of print ad­ver­tis­ing and cir­cu­la­tion rev­enue, Post­media chief ex­ec­u­tive Paul God­frey says progress was made to­ward Post­media’s trans­for­ma­tion plan. “This has been a quar­ter where we’ve seen our new strate­gies tak­ing shape,” he said.

Brian Bidulka

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