MONTREAL – Quebecor Media’s broadcasting, publishing and movie unit, TVA Group, reported net income of $12.8 million for the second quarter of 2008, 23% lower than the corresponding quarter of 2007.
TVA saw a drop of $1.5 million in the television sector’s operating income against the same quarter of 2007, “resulting essentially from the negative impact of an accrual of $5.7 million related to disputed regulatory fees,” says the release. Those are the Part II fees that had been collected by the CRTC for years, but that broadcasters fought in the courts as an illegal tax. In late 2006, the Federal Court agreed it was an illegal tax and TVA stopped accruing the fees.
But this April, the Federal Court of Appeal overturned that decision and the broadcasters have now appealed to the Supreme Court of Canada.
In the meantime, TVA and other broadcasters have begun accruing the fees again.
On a comparative basis, however, normalized operating income for TVA’s television sector posted growth of 18% over the operating income for the same quarter of 2007, generated mainly by TVA Network.
TV revenues (including its specialty TV assets) were $86.6 million in the quarter, up 5% over Q2 2007.
The company’s consolidated operating income was $21.7 million, compared with operating income of $22 million for the same quarter of 2007.
Since the beginning of the fiscal year, the Company has generated net income of $18.5 million, or $0.70 per share, compared with $17.5 million, or $0.65 per share, for the corresponding period of 2007.
"Considering the slowdown in the Canadian advertising market, we are satisfied with the contribution made by our three business segments in the second quarter of fiscal 2008. Excluding the adjustment for the disputed regulatory fees, TVA Group’s normalized operating income saw growth of 21% over the second quarter of 2007. With a market share of 27 and 24 of the market’s 30 best-watched programs, TVA Network achieved advertising revenue growth of 1.7% in an extension of the unusual economic environment in Quebec’s French-language television market. In addition, advertising and subscription revenues from specialty channels each grew 13% compared with the same period of 2007," said Pierre Dion, president and CEO, in the press release.
