By Ahmad Hathout
Corus on Friday reported lower revenue but higher profit in its fiscal second quarter, and said its programming has picked up pace following the Olympics.
“The winter Olympics, as expected, resulted in a delayed start to our global winter and spring schedule, along with audience and financial impacts consistent with prior Olympic years,” Corus CEO John Gossling said in an earnings conference call Friday. “These included shifts in the timing of programming and marketing costs as well as temporary disruption to typical advertising investment and viewing patterns.”
But Gossling said the media company’s programming picked up viewership pace after the sports event, which occurred in February. These types of events, such as the Blue Jays World Series run, are historically a difficult time for the media company, as it doesn’t have sports content to pull eyeballs and advertisers.
“Strong audience engagement around returning franchises and new content launches has driven improved tuning past Olympics, with titles like Survivor continuing to be important contributors across platforms,” Gossling said on the call. “As more of our spring programming rolls out, we’re encouraged by the improved performance we’re seeing and remain focused on driving engagement and growth of our digital ecosystem.”
The company said it is now awaiting for CRTC approval of its recapitalization transaction, which was greenlit by the Ontario Superior Court last month, that will allow it to free up cash and reduce its debt and other liabilities by more than $500 million.
The company reported lower TV advertising and subscription revenue, contributing to a 15 per cent decrease in its overall revenue, which sat at $230.2 million for the period that ended February 28. Television revenue was down 16 per cent to $212.4 million and radio revenue was down four per cent to $17.8 million compared to the same period last year.
Breaking that down further, television advertising was down 21 per cent to $102.3 million; subscription revenue was down 12 per cent to $98.9 million; and the distribution, production and other segment was up eight per cent to $11.2 million.
“Our results were impacted by lower demand for linear TV in the broader advertising market, persistent macroeconomic factors and … by the temporary disruptions to February’s programming schedules and advertising investments due to the Olympics,” Doug Spence, vice president of finance and planning, strategy and treasury, said on the call.
“On the subscriber side, lower revenue was driven by the reduced number of specialty channels in our portfolio compared to the prior year, plus ongoing declines in the traditional linear subscription business,” Spence added.
Profit, however, was up 72 per cent over that period to $30.2 million, thanks to a 48-per-cent increase in television net earnings, which sat at approximately $33.5 million in the quarter, and radio net earnings that were up 33 per cent to about $2 million – offset by still-lower losses in corporate. Gossling said the improvement was due to “programming schedule timing, the absense of certain one-time costs incurred in the prior year, and ongoing cost-containment initiatives.”
Going forward, Gossling said the company is “prioritizing strategic scheduling for the upcoming broadcast year to continue building on the audience success we’re seeing across the portfolio. At the same time, we remain focused on creating new revenue opportunities through product innovation and the continued growth of our digital platforms. We are also maintaining a disciplined approach to costs with ongoing efforts to rightsize our cost structure and aligning with the realities of today’s market.”
