DARTMOUTH – Thanks to new stations in Calgary and Charlottetown, radio broadcaster Newfoundland Capital Corporation reported revenue growth of 7% to $26.2 million in the second quarter, ended June 30th and 6% to $45.7 million year-to-date, as compared to the same time frames from 2006.
Earnings before interest, taxes, depreciation and amortization were $7.2 million in the quarter and $7.3 million year-to-date. Excluding the effect of last year’s marketable securities gains, $6.7 million in the quarter and $8.7 million year-to-date, consolidated EBITDA improved $2.2 million in the quarter and $1.1 million year to date, says the company’s press release.
Net income of $5.8 million ($0.53 per share) in the quarter was $1.7 million lower than 2006 due to lower investment income, explained the company. Year-to-date, net income of $13.2 million ($1.19 per share) was $4.5 million better than 2006 driven by a $3.8 million gain on disposal of an equity accounted investment and a $10.8 million gain realized on the disposal of Halterm Income Fund Trust Units.
The company also noted it has taken steps to streamline its corporate structure in situations where it owns less than 100% of a subsidiary. As part of this initiative, the company entered into agreements to purchase two minority interest positions in certain of its broadcast properties, and in another case, it sold a minority interest in one broadcast property.
In May, Newcap acquired for $10.7 million the 24% minority shareholder’s interest in 3937844 Canada Inc. which holds 21 of the Company’s 33 licences in Alberta.
And in July, the company entered into an agreement to acquire the 38% minority interest in Atlantic Stereo Limited, which operates the two FM licences in Moncton, New Brunswick, for $6.9 million. The purchase is subject to CRTC approval.
In April, the Company disposed of its 29.9% interest in Larche Communications (Kitchener) Inc. which operates an FM radio station in Kitchener-Waterloo, Ontario for proceeds of $4 million.
Finally, in July the CRTC awarded Newcap two new FM licences, one in Sydney and one in Kentville, Nova Scotia, and the right to convert an AM signal to FM in Carbonear, Newfoundland and Labrador.
"We are pleased with the approvals granted to us by the CRTC this year, which include two new FM licences and the right to convert three AM stations to FM. Owning 100% of all our licences in Alberta and Moncton, New Brunswick will allow us to fully capitalize on our strong competitive position in those regions", said Rob Steele, president and CEO, in the press release. "Financial results in the quarter and year-to-date are in line with expectations and we are continuing to monitor operating expenses to generate year-over-year growth in broadcasting EBITDA."
