WINNIPEG – While CanWest Global Communications reported overall revenue and earnings increases for the third quarter of 2005, the company saw its Canadian TV operations suffer some more.
Revenue at CanWest’s Canadian broadcasting operations declined by 3% to $201 million in the quarter ended May 31st, compared to Q3 2004. EBITDA of $57 million for the quarter was 7% below last year’s third quarter
Of late, Global TV has fared poorly in the ratings in comparison to CTV, which has routinely taken the bulk of the ratings gains in the Canadian market. “Compared to previous years, weaker ratings performance in difficult market conditions, contributed to the decline in revenues and EBITDA at Global,” says today’s CanWest release.
As reported by www.cartt.ca, Global has taken a number of personnel steps to turn the TV group around, bringing in new blood and saying so long to others.
However, the company also has a sizeable international broadcast division with TV and radio assets in Australia, New Zealand and Ireland, and it’s also the largest newspaper publisher in Canada. Overall, CanWest reported consolidated net earnings of $53 million, comparable to the consolidated net earnings for the same period in 2004 of $54 million.
Earnings from continuing operations came in at $59 million, up 12% from the same period last year. Losses from discontinued operations track to production house Fireworks Entertainment, the sale of which is expected to close before the end of July.
Consolidated revenues for the three month period ended May 31, 2005 increased by 3% to $810 million compared to Q3 ’04. Consolidated earnings before interest, taxes, depreciation and amortization for the quarter were $198 million, down from $202 million in the same period in 2004.
Revenues for the quarter from Canadian publishing and online operations increased by 4% to $323 million. Publishing and online EBITDA was $75 million, up one million. Publishing and online EBITDA was up approximately 5% in the quarter when losses associated with new businesses under development are excluded, notably the new free commuter tabloid Dose, distributed in five Canadian cities, and CanWest’s joint venture with Torstar and Metro SA in a similar newspaper Metro in Vancouver and Ottawa.
With all the speculation surrounding the spin-off of its print division into an income trust, the company had this to say: “That possibility remains under close and active consideration and the company expects to take such a decision this fall. In the meantime the company remains focused upon strengthening its balance sheet and creating value for our shareholders.
CanWest’s South Pacific television operations continued to register strong results for the quarter. TEN Television Network recorded a 3% gain in revenues to $194 million and Network TEN expects a strong finish to the Australian television season as several hit programs such as Big Brother are just now starting to make an impact on the ratings. In the week ended June 25 Big Brother programs alone accounted for six of the top 20 programs in Australia in the 16-39 demographic.
CanWest MediaWorks (NZ) Limited also experienced a strong third quarter. New Zealand television, TVWorks, recorded a 16% increase in revenues for the quarter to $31 million and 27% growth in EBITDA to $6 million.
CanWest’s 45% interest in TV3 Ireland’s generated EBITDA of $4 million for the quarter, a 43% increase from the prior year on revenue growth of 10% to over $10 million.
For the nine month period ended May 31, 2005, CanWest recorded consolidated revenues of $2.37 billion, an increase of 6% compared to the first nine months of the prior year. Consolidated EBITDA for the first nine months of fiscal 2005 was $636 million, 7% higher than consolidated EBITDA of the first three months of fiscal 2004.
