TORONTO – While TV and radio revenues improved and met expectations, charges taken thanks to debt refinancing caused Corus Entertainment to record a $65.7 million loss in the second quarter, ended February 28.
"We kept pace with our overall expectations for the year in the second quarter on the strength of our television results," said John Cassaday, president and CEO. "As previously disclosed, we incurred an $80.7 million after-tax debt refinancing cost in the quarter to retire our high-yield notes and now expect to realize interest expense savings of $20 to 25 million per annum".
Consolidated revenues for the specialty and pay TV (Movie Central, CMT, W), radio (Q107, CKNW and 49 other stations) and content (Nelvana) company were $164.4 million in the quarter, up 6% over Q2 2005. Consolidated segment profit was $42.2 million, up 11% from $38.0 million last year.
Corus Television contributed quarterly revenues of $90.9 million, up from $81.7 million last year led by specialty ad growth of 12% and subscriber growth of 11% (Movie Central subscribers are now at 814,000 said Television president Paul Robertson, during a conference call with financial analysts, with 14,000 additions coming since the end of Q2 – thank you Soprano family). Quarterly segment profit increased to $36.4 million, up 20% from $30.4 million last year.
Corus Radio revenues were $57.8 million, up 8% from $53.5 million last year. Segment profit was $9.5 million, down 5% from $10.0 million last year. Revenue and segment profit were impacted by the sale of Corus’ Red Deer assets and the multi-station swap in the province of Québec with Astral Media. On a same station basis, revenue was up 7% and segment profit was up by approximately 12%.
Content division revenues were $17 million, down from $20.8 million last year. Segment profit was $1.9 million compared to $1.5 million last year. Revenues were down in the quarter as fewer episodes were delivered and the Beyblade merchandising revenues declined. The division continues to generate positive cash flow.
Consolidated revenues for the six months ended February 28, 2006 were $359.7 million, up 7% from last year. Consolidated segment profit was $111.9 million, up 11% over the first half of 2005. Net loss for the six months was $34.3 million as compared to income of $42.0 million last year.
Corus Television contributed six month revenues of $199.7 million, up from $180.2 million last year led by specialty ad growth of 13% and subscriber growth of 9%. Corus’ pay television assets increased their subscriber base from 748,000 at August 31, 2005 to 799,000 at the end of the second quarter. Six month segment profit increased to $88.4 million, up 17% from last year.
Corus Radio revenues were $130.2 million, up 9% compared to 2005’s first half. Segment profit was $31.4 million, up 1%.
Also mentioned during the analyst call was the upcoming launch of "Treehouse Direct, which will apparently be a "digital download to own" video on demand model where content is delivered to consumers via the web.
Look for more on this service to come.
