Torstar reports fourth quarter profit of $14M
Daily brand digital subscriptions increased to almost 80,000
Torstar Corp. reported a profit of $14.1 million in the fourth quarter of 2019, compared with a loss of $3.1 million in the same period a year ago, as the company continued to see digital subscriber growth while print advertising revenues declined.
Net earnings were boosted by a gain of $24.6 million on the transfer of Torstar’s defined benefit pension plans to the Colleges of Applied Arts and Technology Pension Plan. There was also a one-time gain of $3.5 million related to the sale of two real estate properties in Ontario.
The newspaper and digital publishing company announced Wednesday that it had almost 80,000 digital subscribers to its Daily Brands news sites, including 28,000 digitalonly subscribers. That’s up from 70,000 and 23,500 at the end of the third quarter.
“While results in the quarter continued to reflect ongoing challenges in the print advertising market, we were pleased with progress in a number of important areas,” said Torstar president and CEO John Boynton, who is also publisher of the Toronto Star.
“We ended the year with almost 80,000 subscribers with digital access including almost 28,000 digital-only subscribers to out Daily Brands news sites as well as over 280,000 registered users across all our Community news sites as part of our broader data strategy to add value to our audiences and advertisers.”
In a conference call with analysts on Wednesday morning, Boynton added that subscription revenue continues to be a solid source of money for Torstar. “We’ve now experienced stable subscriber revenues for the fifth consecutive quarter,” he said.
Boynton previously described how Torstar’s transformation into a digital publishing company is continuing on the advertising side.
“On the digital advertising front, after a year of hard work, we are now beginning the rollout of new products and initiatives which will better leverage data to support our efforts to grow this area of our business,”
Boynton said. In mid-December, Torstar stopped publishing the print editions of its Star Metro free dailies in Toronto, Vancouver, Calgary, Edmonton and Halifax as part of its digital transformation.
After the end of the fourth quarter, Torstar announced an agreement to sell the land and building used by the Hamilton Spectator, for $25.5 million. That deal is expected to close in the first quarter of 2020.
The company ended the quarter with $42.2 million of cash and cash equivalents, and $8.2 million of restricted cash. Torstar has no bank debt.
Operating revenue for the quarter was $124 million, down $20.8 million from the fourth quarter the previous year, a drop of 14 per cent. Subscriber revenue was roughly even, with growth in digital subscription revenue offsetting a small decline in print subscriber revenue.
Print advertising revenue was down 24 per cent compared with the fourth quarter a year ago. Digital advertising revenue fell 7 per cent in the fourth quarter compared to a year ago, with growth in local digital advertising at community news sites and other digital revenue streams at the Star offset by declines at eye Return Marketing and other digital properties.
Torstar reported adjusted earnings of 11 cents per share in the quarter, compared with 15 cents per share in the same period a year ago. Adjusted earnings before interest, taxes, depreciation and amortization, including joint ventures and Vertical Scope, was $23.4 million in the quarter, down $6.4 million from the same period a year ago and included the benefit of $9.4 million in tax credits.
Subscription revenue continues to be a solid source of money for Torstar