WINNIPEG – Struggling Canwest Global Communications Corp. reported a net loss of $110 million for its third quarter, and a $1.58 billion net loss for the nine month period ended May 31, 2009.
The losses include a non-cash $247 million impairment of goodwill in Canwest’s publishing operations, interest rate and foreign currency swap losses of $177 million, and foreign exchange gains of $368 million primarily related to the foreign currency gains associated with the $U.S. debt that is no longer hedged.
Quarterly revenues were $727 million, compared to $846 million for the same period last year, while operating profit before restructuring and impairment expenses dropped to $118 million for the quarter compared to $182 million in the third quarter of fiscal 2008.
For the first nine months of fiscal 2009, reported revenues dipped 7% to $2.24 billion and reported operating profit before restructuring impairment and other one time expenses declined by 27% to $410 million.
“While much attention has been focused on our efforts to recapitalize, we are continuing to invest in our businesses in order to drive operating results”, said president and CEO Leonard Asper, in the press release announcing the financial results. “This includes selling non-core assets, purchasing a strong television line-up for next season, investing in quality domestic programming, focusing greater resources on local audiences in publishing, and building our digital media properties, online video and other content.”
Canadian television operations, including the CW Media specialty television operations, reported third quarter revenues of $276 million, 2% lower than the previous year. Operating profit in the third quarter was $74 million, down 3% compared to $76 million the previous year.
Australian TV network TEN’s third quarter revenue of $151 million was down 22%, (16% in local currency) as compared to the same quarter in fiscal 2008. Revenues for the company’s publishing operations for the third quarter were $269 million, 19% lower than revenues of $333 million for the same period in fiscal 2008.
As Cartt.ca has reported, Canwest is in discussions with various parties, including the members of the ad hoc committee of holders of 8% senior subordinated notes of Canwest Media Inc., regarding the recapitalization of the company that could involve a cash investment and/or a conversion of certain of its existing debt to equity, to reduce the debt of Canwest Media.
Failure to complete an agreement in principle on a recapitalization transaction before the expiry of its forbearance agreement on July 17, 2009 could result in a demand to immediately repay all Canwest Media Inc. debt, the release said. There can be no assurance that a recapitalization will be completed.
“Canwest remains focused on reducing operating expenses and driving revenues to enable the Company to capitalize on the economy when it begins to improve", the release continued. Canwest continues pursue a reorganization of its capital structure that will allow the Company to satisfy its obligations which are currently in default.”
