MONTREAL – Restructuring costs at struggling Sun TV combined with a drop in advertising revenue helped pull down second quarter profits at Quebec-based Broadcaster TVA Group.
Net income for the period ended June 30, 2010 was $11.2 million, down $4 million compared with $15.2 million for the same period last year. However, consolidated operating income increased 4.1% to $26.2 million, compared with $25.1 million in the same quarter of 2009.
"We are pleased with the second quarter financial results, as we posted some growth in operating income in both our business sectors in an advertising market that remains precarious and short term”, said president and CEO Pierre Dion, in a statement.
TVA said that it racked up $5.66 million in restructuring costs of operations and impairment of assets related to the “repositioning” of its Toronto-based SUN TV. It announced in June that it plans to transform Sun TV into a new news and opinion specialty service called Sun TV News effective early next year. The company also recorded an 8.5% decrease in the operating income from its TVA Network, which it attributed to a 5.2% decline in advertising revenues.
Operating revenues in the company’s publishing sector increased by 0.6% and operating expenses decreased by 1.9% over the same quarter of 2009, which translated into an increase in operating income of 12.2% and a profit margin of 19.7%, compared with 17.6% for the same quarter last year.
TVA Group, a subsidiary of media giant Quebecor Inc., is the largest private sector broadcaster of French-language entertainment, information and public affairs programming, and magazine publishing in North America. It also operates Sun TV, a general-interest station based in Toronto.
