MONTREAL – While the company’s Rythme FM radio revenue is still rising, Cogeco Inc.’s television division is still a drag on earnings.
Cogeco Inc. president and CEO Louis Audet told a financial analyst conference call after the company released its third quarter results Monday morning that its Quebec broadcast station TQS "continues to be a challenge," but that the fall season looks to be "attracting considerable advertising interest," he said.
Television revenue remained relatively stable in the third quarter compared to the same period last year. TQS generated good audience ratings for Loft Story II over portions of the second and third quarters. "Building on this success, Loft Story III and other programming improvements should impact positively our advertising sales for the next season", added Audet
On the radio side, Rythme FM maintained its first position in the Montreal French market. All of its other stations are gaining in popularity in their respective markets, says the press release.
During the third quarter and first nine months of fiscal 2006, revenue increased by $2.4 million and $5.3 million respectively (to $35.8 million and $102.5 million). All radio stations contributed to the increase in revenue. "The advertising market remains difficult for conventional television in the Francophone market," says the press release.
Operating income in the company’s media division before amortization declined in the third quarter and first nine months of fiscal 2006 by $2.2 million (a 45% drop) and $6.3 million (a 74.5% plunge) respectively. For the third quarter and first nine months, TQS’s operating income before amortization decreased as a result of greater investment in television programming, combined with small revenue growth. During the third quarter and the first nine months of fiscal 2006, radio’s operating income before amortization improved due to revenue growth.
– Greg O’Brien
