Loss widens amid currency losses, ad slump
TORONTO — Postmedia Network Canada Corp. reported a larger second-quarter loss on Thursday partly because of an increase in foreign currency exchange losses and weaker print advertising revenues that are falling across the industry.
Postmedia’s revenue in the second quarter also fell 10.5 per cent to $145.45 million, primarily due to weaker print advertising sales that slumped 16 per cent to $75.5 million.
Print circulation revenue dropped 4.3 per cent to $45.5 million, while digital revenue decreased 2.8 per cent, or $600,000, year-over-year.
Despite the drop in earnings and revenues, the company’s ongoing transformation program to reduce legacy costs by 15 to 20 per cent over three years remains on track.
Annualized cost savings during this past quarter were approximately $ 19 million, bringing total net annualized cost savings to approximately $131 million, or 19 per cent of operating costs, since the program was announced in July 2012.
The media company — whose stable of daily newspapers includes The StarPhoenix, the National Post, Ottawa Citizen and Calgary Herald — reported a net loss of $58.2 million for the quarter ended Feb. 28, compared with a loss of $25.3 million in the same period last year.
“As we ready Postmedia to take on greater scope and scale, with the addition of the Sun Media brands, our focus continues to be engaging audiences across four platforms and providing advertisers with innovative made-in-Canada marketing solutions,” said Paul Godfrey, Postmedia’s president and chief executive officer, in a release. The Competition Bureau of Canada said it will not contest the company’s purchase of 172 Sun Media English language newspapers, digital properties and specialty publications.
“We look forward to welcoming our new employees and brands and together we will continue the transformation of Postmedia into a news media organization poised to take on foreign-based digital giants,” Godfrey said.