WINNIPEG – Thanks to a $164 million gain on the sale of its Irish TV assets, CanWest Global Communications showed net earnings of $179 million for the fiscal year ended August 31st, compared to $10 million for fiscal ’05.
Without the TV3 sale, net earnings were up 50% over 2005.
Consolidated revenues were $2.9 billion for 2006, a decline of 5%. Consolidated EBITDA for fiscal 2006 was $509 million, a 28% decline as compared to 2005. The company recorded net earnings of $155 million for the fourth quarter ended August 31, 2006 compared to a net loss of $106 million for the same period in 2005.
"All our major operations faced difficult advertising markets over the past year with adverse currency translation contributing further to declines in results from the South Pacific," said company CEO Leonard Asper, in the press release Thursday. CanWest recently hired an investment bank to help the company figure out what it wants to do with its Australian and New Zealand media properties.
"Markets now appear to be stabilizing and we expect a firming of revenues and EBITDA in the new fiscal year. Our publications group posted a substantial increase in EBITDA in the fourth quarter as the impact of actions taken earlier in the year to reduce costs began to take hold. A strong start in the fall ratings is tracking to improving revenues at our Canadian television operations and should be reflected in EBITDA growth for the first quarter," added the CEO.
During a conference call with financial analysts, Asper and TV chief Kathy Dore said the Global Television schedule has gained traction among media buyers and revenue is up in the mid-to-high single digit percent range this fall, the first quarter of fiscal 2007. Asper also said the re-branding of Prime to TVtropolis has boosted CanWest’s TV side as well.
"We are meeting our projections and exceeding them on certain shows," said Dore. Even with the Major League Baseball playoffs wreaking havoc with Global’s schedule (it’s popular shows are purchased from Fox, which pre-empts many fall shows for the playoffs and World Series), Global’s ad sales have shown an improvement.
With Apprentice and 24 coming on the schedule next, "we’re quite optimistic about the second half of the year," said Dore. The spot market (more immediate ad buys) is strong this fall, she added.
However, for 2006 Canadian television operations experienced a 6% decline in revenues to $656 million. EBITDA of $31 million for the year was 75% below the result for the prior year "due to substantially higher costs associated with ratings-driven investment in Canadian and international programming during a weak revenue environment," explained the press release.
"That investment was beginning to pay off at the end of the year with increases in airtime revenue in the fourth quarter and indications of continuing gains as we move into fiscal 2007. Global had several programs in the top ten in the major Toronto and Vancouver markets including the Survivor-Cook Island, House, Prison Break, and Rock Star. Global’s ET Canada, solidified its hold on the number one position among Canadian entertainment magazine programs. Global National also became the number one national news program in 2006. Canadian broadcast operations incurred charges of $11 million for the year as a result of restructuring initiatives and associated severance costs," says the release.
Dore also said that the company is keeping an eye on costs but doesn’t anticipate any immediate moves to trim expenses. Calling rationalization "long-term and gradual," the company will be "talking a little bit more about it as this fiscal year winds down," she said.
