Postmedia records second- quarter loss

TORONTO — Postmedia Network Canada Corp. posted a $ 25- million loss in the second quarter as it continued to rein in costs in the face of declining revenues.

The Toronto- based newspaper company said Thursday that sales dropped by 9.1 per cent to $ 162.5 million in the period.

Postmedia did get its operating expenses down 8.7 per cent to $ 140.4 million for the quarter, but restructuring and depreciation costs were up, leading to the net loss of $ 25.3 million, a wider loss than the $ 15.8 million in the same period last year.

The company, which owns Canada’s largest chain of Englishlanguage dailies, including The Vancouver Sun, said revenue from print advertising was down 14.7 per cent to $ 89.9 million.

Print circulation sales fell 0.7 per cent to $ 47.6 million and digital sales also dropped 0.7 per cent in the period to $ 21.1 million.

“We are seeing similar effects on print advertising revenues as our industry peers,” chief executive Paul Godfrey said in a memo to employees Thursday.

“Our strategy is focused on developing new products and re- engineering the way we produce and distribute content.”

Eight of Postmedia’s 10 daily newspapers will launch redesigned versions of their print, web, tablet and mobile products later this spring.

Godfrey said he believes the initiative “will set us on a new course,” by improving offerings for both readers and advertisers.

Last May, Postmedia launched a digital paywall for all of its newspapers’ websites and Godfrey said Thursday that subscribers now total more than 140,000.

Postmedia said it has now cut $ 98 million out of its annual costs since launching a cost transformation program in July 2012. However, it is still grappling with $ 484 million in long- term debt.

When asked by analysts on a conference call Thursday about any possible divestitures of its assets, Godfrey said “we always look, we have got to think of the best interest of brands. We do not have a ‘ for sale’ sign on any major brands that we have.”

“We are approached from time to time, with respect to if we are interested in selling certain properties,” Godfrey added. “We have declined even discussing it with people. I guess we never shut the door completely. But over the long term, who knows what is going to happen.”