TORONTO – A weak TV advertising market weighed down first quarter results at Corus Entertainment.
The company said Wednesday that net income attributable to shareholders for the quarter ended November 30, 2017 was $77.7 million, up from $71.1 million in the same period last year, which includes business acquisition, integration and restructuring costs of $1.6 million. Adjusting for the impact of this item resulted in an adjusted net income attributable to shareholders of $78.9 million this quarter.
Consolidated revenues for the quarter were $457.4 million, down 2% from $468.0 million last year, and consolidated segment profit was $177.9 million, down 7% from $192.0 million last year.
"Our first quarter results were below expectations, as gains in local radio advertising and our Nelvana content business combined with better than expected subscriber revenues were more than offset by weak television advertising market conditions", said president and CEO Doug Murphy, in the company's press release. "We remain committed to advancing our strategic priorities as Canada's only pure play media and content company. Our ongoing financial discipline balanced with strategic growth investments in content and advanced advertising initiatives position us well over the longer term in a rapidly evolving media and content marketplace."
Corus’ television segment revenues for the quarter dipped 2% to $415.5 million from $425.6 million year-over-year, while radio revenues were relatively flat at $41.9 million compared to $42.4 million last year.
Television segment fell 9% to $168.6 million from $184.4 million year-over-year, while radio segment profit increased 2% to $13.5 million from $13.3 million.
Bay Street did not take kindly to the news and the company's share price slid almost 17% during the day's trading on the TSX to $9.17.
Other highlights from Corus’ Q1 financial results include:
Television
– Advertising revenues decreased 4% in Q1 2018;
– Subscriber revenues were flat;
– Merchandising, distribution and other revenues increased 7%; and
– Segment profit margin of 41% in Q1 2018 compared to 43% in the prior year.
Radio
– Advertising revenues were down 1% in Q1 2018; and
– Segment profit margin of 32% in Q1 2018 compared to 31% the prior year.
The company, however, is hopeful that work on its advanced advertising technology and newly offered premium video on demand service (launched last month with BDU partners Rogers Cable and Shaw Cable) will help slow the bleeding. The new VOD offering is available on eight Corus channels (HGTV, Food Network, Slice, Showcase, W Network, YTV, Teletoon, and History) and includes full season stacking rights of about 150 titles across all eight channels services by the end of the broadcast year, as well as movies on W Network, YTV and Showcase.
The company plans to launch it with other BDUs as soon as possible in 2018.
As well, Corus has launched dynamic ad insertion to Rogers customers on titles coming from both Global and specialty. This new platform, it's hoped, will boost revenues as it allows for better ad targeting and more transparent reporting to buyers.
