WINNIPEG – Canwest Global Communications Corp. reported a staggering net loss of $1.44 billion in its second quarter, which included a $1.19 billion write-down of assets primarily in its publishing operations.
Describing the write-downs as “consistent with those of other media organizations throughout North America and which reflect lower future profit expectations as a result of the current outlook for advertising in the operations”, the company clarified in an announcement that the write-downs are all are non-cash charges to income “that do not affect its liquidity, cash flows from operating activities, debt covenants or have any impact on future operations”.
For its second quarter ended February 28, 2009, Canwest’s revenues dropped 9% to $637 million, compared to $701 million for the same period last year. For the first six months of fiscal 2009, its revenues decreased 3% to $1.52 billion.
Operating profit before restructuring and impairment expenses was $75 million for the second quarter, a decline of 31% compared to $109 million in the second quarter of fiscal 2008, while operating profit for the first and second quarter combined declined by 22% to $295 million.
“In spite of the recessionary economy and continued losses at most of our local television stations, our underlying businesses were able to generate $295 million in operating profits before restructuring and impairment expenses for the first half of the fiscal year,” said president and CEO Leonard Asper, in the announcement. “We continue to out-perform the industry in several areas including audience growth. At the same time, our focus on reducing costs while transforming the business should position us to take advantage of a growing advertising market as the economy begins to improve.”
Canadian television operations, including the CW Media specialty television operations, reported second quarter revenues of $234 million, which it called “in line with the previous year”.
Its Australian Network TEN’s second quarter revenue of $112 million was down 19% from $139 million during the same quarter in fiscal 2008. Revenues for Canwest’s publishing operations for the second quarter were $258 million, 16% lower than revenues of $306 million for the same period in fiscal 2008.
