TORONTO – With a share price languishing under $2.50 (a year ago, is was nearly $10) CanWest Global president and CEO Leonard Asper is desperate to show the markets that his company’s position is not as bad as is reflected by its share price
"These solid results demonstrate that we continue to experience growth even in the face of a softening market," he said this morning on the release of the company’s third quarter results.
"Given the diversity and strength of our properties we believe that CanWest’s stock is undervalued.”
Asper added all of the company’s operations saw growth, despite a loss of $28 million in the quarter, primarily due to interest charges. "Our specialty channels continue to grow both in terms of popularity and revenue generation and our publishing assets are also performing ahead of any other similar assets in North America. We continue to focus on taking advantage of our size and scope by generating increasing and identifiable audiences, from which to monetize content, while rationalizing our cost structure, to deliver better value to our shareholders,” he explained.
The company’s Canadian television operations, including CW Media (the former Alliance Atlantis specialty channels), reported revenues of $281 million in the quarter ended May 31st, an increase of 54% over the previous year. EBITDA more than doubled to $76 million.
For the nine months ended May 31, 2008, reported revenues were $823 million and EBITDA was $165 million, up 48% and 131% respectively, compared to May 31, 2007. Those results of course, primarily reflect the AA acquisition.
Canadian television operations, including revenue and adjusted EBITDA of the specialty operations of Alliance Atlantis on a pro forma basis for the three months ended May 31, 2007, revenue and EBITDA would have increased 5% from $267 million and 40% from $54 million. For the nine months ended May 31, 2008, revenue and EBITDA increased 3% from $803 million and 16% from $143 million respectively over the prior year on a pro forma basis.
Excluding CW Media, Canadian television operations reported third quarter revenues of $183 million, slightly ahead of revenues for the same period in fiscal 2007. EBITDA of $39 million was up 25% from $31 million for the corresponding period last year.
However, for the nine months ended May 31, 2008, revenues were $544 million and EBITDA was $64 million, down 2% and 11% respectively, from the same period last year, which the company blamed on the American television writers strike that stopped all new TV production for most of last TV season.
CanWest’s Australian asset, Network Ten, saw third quarter revenue of $194 million, an increase of 8% from the same quarter in the previous year. Ten’s EBITDA of $35 million was up 21%. For the nine months ended May 31, 2008, reported revenues were $575 million and EBITDA was $173 million, up 8% and 13% respectively, from similar periods last year.
Revenues for the company’s publishing operations (its chain of newspapers such as The National Post, Ottawa Citizen and many others) in the third quarter was $334 million, “slightly higher than revenues for the same period in fiscal 2007,” says the press release.
Publishing EBITDA of $79 million for the third quarter was up 10% from $72 million for the same period in fiscal 2007. For the nine months ended May 31, 2008, revenues were just over $1 billion and EBITDA was $240 million, up 2% and 13% respectively, from similar periods last year. “The double digit growth in EBITDA continues to reflect the focus on cost containment within the publishing operations,” says the release.
The company also added its United Kingdom radio properties “are no longer core” and that it is pursuing the sale of one or more of these stations, which collectively lost over $5 million so far in fiscal 2008, on just $1.3 million in revenue. CanWest owns three radio stations, one each in Bristol and Manchester, England and one in Aberdeen, Scotland, which just launched last fall.
The company made no statement on its four radio station operation in Turkey, which has earned $11 million in revenue so far this year and $4.5 million in profit.
