WINNIPEG – Solid Q1 results were almost the last thing anyone wanted to talk to CanWest Global Communications CEO Leonard Asper, given the company’s announcement Wednesday afternoon.
However, the company reported consolidated net earnings of $66 million for the quarter ended November 30th 2006, compared to consolidated net earnings of $30 million for the same quarter last year.
The company’s consolidated revenues for the quarter increased by 1% to $860 million but consolidated EBITDA declined by 3% to $227 million for the quarter compared to $233 million for the first quarter of fiscal 2006.
"We are satisfied with our first quarter results particularly with the significant improvement in Canadian television," said Asper in the press release of the TV and newspaper company.
"Our programming strategy is working, increasing the number of top 10 and top 20 shows, and is recognized by our advertisers. Cost containment initiatives in our newspaper and interactive operations plus strong online revenue contributed to the 8% improvement in EBITDA for those operations. We also see the beginning of a positive turnaround at Network TEN and a strong market in New Zealand. In sum, this is an encouraging start to the new fiscal year and we expect this positive trend to continue as we get further into fiscal 2007."
Revenues and EBITDA for the publications and interactive operations continued to demonstrate growth, with revenues of $344 million up 1% compared to the first quarter last year, and EBITDA of $88 million for the quarter, representing an 8% gain compared to the same quarter last year. Canadian television operations registered significant improvement over last year’s result with revenues up 11% for the quarter to $208 million and EBITDA of $38 million up 30% over last year’s first quarter result, in highly competitive market conditions, reads the press release.
A higher exchange rate for the Canadian dollar as well as challenging advertising markets continued to affect results in Australia compared to one year ago although the trend line has improved compared to earlier quarters. At Network TEN although ratings continued to be very strong, revenues decreased by 3% from last year in local currency terms, a significant improvement from the revenue declines of the previous four quarters. In Canadian currency, revenues of $216 million for the quarter were down by 6% from the first quarter of fiscal 2006. A 17% decline in EBITDA at TEN was attributable to higher investment in programming to sustain TEN’s ratings leadership in its target 16-49 year old audience. Eye Corp reported revenues of $36 million for the quarter, 20% higher than for the first quarter last year. EBITDA of $5 million for the quarter was down by 33% compared to the prior year, due entirely to expenditures associated with the substantial international expansion of Eye Corp into the US and UK markets which should pay off in higher future earnings, says the release.
CanWest’s New Zealand broadcasting operations registered a 2% increase in revenues for the quarter in local currency terms. However as a result of currency translation, first quarter revenues of revenues of $56 million and EBITDA of $18 million reflected declines of 7% and 6% respectively, from last year’s result.
