Postmedia hopes going digital will stanch bleeding
Restructuring costs total $13M in latest quarter
Postmedia Network Canada Corp. continued to experience significant revenue erosion at its newspaper business during its fourth quarter, which ended with a $22.8-million net loss.
The company, which owns the National Post as well as newspapers in several of Canada’s largest cities and smaller print and digital publications, said the loss amounted to 24 cents per share. That compared with a profit of $40.3 million or 43 cents per share in last year’s fourth quarter, when the bottom line was helped by a gain from the sale of Infomart and a lower restructuring expense.
Restructuring costs totalled $13 million in the quarter, up from $1.7 million a year earlier. The company announced in June that it would begin another round of cost-reductions aimed at reducing compensation expenses by about 10 per cent during the financial year ended Aug. 31.
The downsizing comes amid declining revenue for most traditional newspaper and broadcasting companies as they battle newer types of digital media and internet services for audiences and advertisers.
Postmedia’s fourth-quarter revenue fell to $158.68 million compared with $176.8 million a year ago, despite a 10 per cent increase in digital revenue, which rose to $28.9 million. Postmedia management has repeatedly said it has a twotrack strategy: keep its legacy print business going long enough through a combination of cost-cutting and asset sales to buy time for building a new digital business.
“We’re sticking with that strategy because it’s working,” chief operating officer Andrew MacLeod said during a conference call to discuss the quarterly report.
He said Postmedia is learning to coexist with Google and Facebook, cited by many media businesses as their main rivals, and reworking Postmedia’s own digital network to “remonetize” the audiences it creates through journalism.