TORONTO — The end of the fiscal second quarter for Corus Entertainment “feels like forever ago,” CEO Doug Murphy told financial analysts Wednesday morning during the conference call which was ostensibly to talk about the December 1 – February 29 period, but was really about how the company is handling the Covid-19 crisis.
Company CEO Doug Murphy and CFO John Gossling talked about the measures the company has taken to protect its people, help its clients and cushion impacts on its bottom line, with Murphy adding everyone will “work together to weather this storm.” The company rapidly deployed about 75% of its 3,400-strong workforce to work from home, distributing nearly 1,000 laptops to make that happen. John Derringer’s Q107 FM morning show is now run from the host’s home as one of 52 radio shows being done from an employee’s home, he said.
While thankful the federal government cancelled this year’s CRTC Part I fees, saving the company $2 million, Murphy also used a portion of the call to reiterate this crisis should not derail the government’s push to update our broadcasting laws, saying the crisis shows it should “accelerate the need for modernization of broadcast policy.”
With all TV production stopped, there is no way Corus can spend the way it is supposed to on Canadian content, so flexibility will be needed there, he said. Also, Corus’ Global Television has not stopped its journalism. “We are rife with fake news and it’s our job to provide real news,” said the CEO, who added news should be the only spending obligations his broadcast outlets should face.
While advertising is of course down – and Murphy said he expects radio to take a hit as now closed local businesses have stopped advertising and since few are commuting, fewer are listening to radio in their cars – he noted TV viewership is way up and broadcasters from around the world are coming to Corus in search of original content with which to populate their schedules.
“Global (viewership) is up 41% and Global News up 51%. Our specialty services are up 18% and our kids business is up 25% – and Global News Radio across the country is seeing significant growth,” said Murphy.
As well, over the past three weeks, globalnews.ca has seen its traffic nearly double, averaging 2.8 million daily unique visitors. Subscribers to StackTV on Amazon Prime Video are also growing and its new app is expanding, he said.
“We have also seen impressive uptake on our newly expanded Global TV App that now offers free 24/7 news streams, as well as access to Global and up to six of our top specialty networks, both live and on-demand, depending on the user’s cable subscription options. We saw almost triple the amount of downloads in the last three weeks since its launch,” said Murphy. Adult Swim and National Geographic have also been added to the app.
As the crisis passes, Murphy hopes some who had moved on from watching TV and have returned in the past three weeks, will stay with it. “Canadians are rediscovering television, certainly, the millennials,” he said, “and the notion of having repeats over the summer might actually be a pretty good thing. It’ll be less expensive than typical and there’s no Olympics, so people will be at home discovering shows that they might have missed, because they were too busy doing other things before the crisis hit.”
Back to the second quarter results, however, consolidated revenues in the period were $376 million, which was a 2% decrease compared to Q2 2019. However, the company’s consolidated profit was $115.9 million for the second quarter of 2020, a 2% increase.
For the six months ended February 29, 2020, Corus reported $843.9 million in consolidated revenues, a 1% decline. The company’s consolidated segment profit was $300 million for the first half of 2020, which was a 2% decrease over the first half of 2019.
In the official company statement on the Covid-19 crisis, the release said: “The entire Corus family has been working tirelessly on business continuity measures that not only enable us to continue delivering programming across our networks, but ensure we are positioned to return to normal operations, when the situation warrants it. Strong operating and financial discipline are engrained in our culture, enabling our team to navigate adeptly through challenges. We are benefitting from the work we have done to create sufficient liquidity and improve our financial flexibility, and our long-term strategy remains unchanged,” said Murphy.
“It is too soon to gauge the impacts of the current Covid-19 outbreak, given the many unknowns related to it. These include the duration and severity of the outbreak. Covid-19 is altering business and consumer activity in affected areas and beyond which may materially impact the company… The company believes it is prudent to conserve cash out of an abundance of caution. As such, the company expects to refrain from buying back shares under its share buyback program in the immediate term. Consistent with this approach, the Board of Directors has elected to defer its decision on the declaration of the June dividend at this time.
“The outside date for a decision on the declaration of the June dividend is June 9, 2020, by which point the company expects to have more clarity on the nature and length of the impact of the Covid-19 pandemic. For greater clarity, the company is not reducing, eliminating or temporarily suspending the dividend at this time.”
For the complete details of Corus Entertainment’s financial results for the second quarter and first half of 2020, please click here.
