MONTREAL – Music distribution and radio company Stingray reported Tuesday first quarter 2021 revenues decreased 35% to $52.3 million compared to the first quarter of last year, primarily of course due to the impact of the Covid-19 pandemic.
While the company did see some organic year-over-year growth in some sectors (such as subscription video on demand which saw an increase of 436,000 subscribers, an 18.6% jump), its Canadian broadcast radio revenues decreased 62.1% at its 104 Canadian radio stations. However, the company cut its quarterly operating costs by 43.8% to $28.3 million. It laid off approximately 90 employees during the quarter.
Q2 cash flow from operating activities increased 44.5% to $38 million compared to $26.3 million and adjusted EBITDA decreased 18.2% to $25.5 million for the period ended June 30. Its adjusted net income came in at $13.5 million in the quarter, a decrease of 18.7%.
“In the context of challenging market conditions related to Covid-19, we are pleased with our results for the quarter. Solid cash flow from operating activities of $38 million allowed us to reduce our debt level and improve our balance sheet,” said company president and CEO Eric Boyko in the press release.
“The Canada Emergency Wage Subsidy (“CEWS”) and our quick and decisive response to implementing significant cost savings initiatives partially offset the impact of lower revenues,” he added. “The full impact of Covid-19 hit the radio segment during the quarter. The timing and areas of deconfinement varied from one province to another, and from one region to another. For provinces and cities that opened their economies faster, we are seeing encouraging signs of recovery and we are confident that key markets for us, such as Toronto and Ottawa, could follow similar patterns.
“The continued launch of new free, ad-supported TV (FAST) channels with major over-the-top providers is fueling exceptional month-over-month growth. Our potential viewer reach is now over 400 million,” Boyko continued in the release. “With regards to Stingray Business, Covid-19 has temporarily slowed down the installation of audio and digital equipment although the pace has picked up recently. We continue to expect double-digit growth for this business in fiscal 2021.”
Considering our capacity to reduce our operating expenses combined with a significant improvement in our balance sheet, we are well positioned to benefit from the strong growth in our broadcast and commercial music revenues for the foreseeable future. We have taken a lead position in OTT distribution and fully operated our pivot into new media distribution. This provides us with great confidence in the future and in our ability to reward our shareholders.”
For the full results, please click here.
