MONTREAL — Quebecor Media subsidiary TVA Group’s financial performance in the second quarter of 2018 was “disappointing”, the company’s president said on Thursday.
TVA Group reported lower earnings across all of its business segments, which include broadcasting (TVA Network), film and audiovisual production (MELS Studios and Postproduction), and magazine publishing (TVA Publications).
Overall, the company’s consolidated revenues were $140.2 million in the second quarter of 2018, down from $152.5 million in the same quarter last year. In addition, it reported consolidated negative adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $3.9 million, which is an unfavourable variance of almost $15 million from the same quarter of 2017.
The company’s poor financial performance resulted in a net loss attributable to shareholders of $9.7 million, or a loss of $0.22 per share, in the second quarter of 2018, compared with a net loss of $1.9 million or $0.04 per share in the second quarter of 2017.
TVA Group’s Broadcasting & Production segment reported negative adjusted EBITDA of $8.35 million in Q2 2018, which represented an unfavourable variance of $13.42 million from the second quarter of 2017. This shortfall was due primarily to a 60% increase in the TVA Sports channel’s negative adjusted EBITDA and a 19% decrease in TVA Network’s adjusted EBITDA, the company said in a news release announcing its Q2 2018 financial results.
The company’s Film Production & Audiovisual Services segment reported positive adjusted EBITDA of $1.98 million for the second quarter of 2018, but this was an unfavourable variance of $47,000 from the same quarter of 2017. TVA Group attributed the earnings decrease to lower volume of activities in visual effects, dubbing and subtitling services as well as in distribution services.
Finally, the Magazines segment reported $2.46 million in adjusted EBITDA in Q2 2018, but this also was an unfavourable variance, in the amount of $1.5 million, compared to the second quarter of 2017. The decrease was the result of lower operating revenues, which were only partially offset by savings generated by staff and expense rationalization plans implemented in recent quarters, TVA Group said.
“Our financial results for the second quarter of 2018 were disappointing, especially in the Broadcasting & Production segment,” said France Lauzière, president of TVA Group, in the news release. “Despite strong ratings for the NHL playoffs on TVA Sports, the fact that the Montreal Canadiens failed to make the first round did negatively impact advertising revenues. TVA Network’s financial performance declined again with a 9% decrease in advertising revenues in Q2 2018. We have made moves to cut operating expenses but the full effect of those initiatives was not yet felt in the second quarter. TVA Network’s market share was stable at 23.8% while our specialty channels increased their combined market share by 0.5 points, led by LCN (Le Canal Nouvelles) which jumped 1.2 points to 5.7%.
“The Magazines segment’s operating revenues were down 15% as a result of the sale and fewer issues of some titles, and reduced advertising revenues across the industry. Despite the decrease, we were able to keep our profit margin above 12% by implementing a series of initiatives to cut costs and improve operational efficiencies.
“Lastly, the Film Production & Audiovisual Services segment’s quarterly financial results held steady year over year. While its financial numbers were stable during the last quarter, we expect MELS to be a growth driver for the corporation going forward. Bookings for our film facilities are optimal for the coming months and our postproduction services are increasingly popular with local and foreign producers alike,” Lauzière concluded.
As an example, MELS Studios announced Thursday that director-producer Roland Emmerich is scheduled to start filming his World War II mega-production, Midway, at the MELS soundstages this fall.
For TVA Group’s full financial results for the second quarter of 2018, click here.
