DARTMOUTH, NS – Growth at both its existing and newly acquired B.C. radio stations drove revenues up by 2% at Newfoundland Capital Corporation (Newcap) to $35.5 million in the fourth quarter. Year-to-date revenue of $130.9 million was $4.3 million, or 3% higher than 2011. But profit for the quarter fell $5.6 million to $7.4 million compared to the same quarter last year. The radio broadcaster also reported it’s still seeking a buyer for its Western Canadian broadcasting assets.
"While revenue growth has slowed compared to the high growth achieved in recent years, the company still maintained positive revenue growth of 3% over 2011, which was one of our best years on record," noted Rob Steele, President and Chief Executive Officer. "Revenue so far in 2013 is trending ahead of 2012 and we are looking to deliver solid EBITDA results again in 2013."
There were several factors impacting profit year-over-year which was $15.2 million lower than 2011 says Newcap. This year it recorded net impairment charges of $6.6 million in contrast to the reversal of $5.8 million of impairment charges in 2011. Also in 2011 the broadcaster recognized a $1.3 million gain on disposal. Finally, during 2012 the company recorded unrealized mark-to-market investment portfolio losses of $2.2 million compared to unrealized gains of $1.3 million in 2011. “Normalizing profit to exclude these items, profit for the year would have exceeded 2011 by $1.3 million or 7%,” said Newcap in a statement.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $11.1 million in the quarter, up $500,000 and 4% higher than last year due to higher revenue. Year-to-date EBITDA was $33.8 million; $1.4 million, or 4% lower than 2011 due to higher operating expenses. Year-to-date EBITDA would have been 2% higher than 2011 if not for the year's $1.1 million non-cash expense related to the extension of stock option expiry dates and the accounting for the company's equity total return swap. The expense reduced operating expenses in 2011 by $1.2 million.
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Newcap highlights:
• Completed the acquisition of an FM radio station in Sydney, Nova Scotia, for total cash consideration of $2.4 million, thereby adding a second FM station to complement its existing FM station in that city. Newcap previously held a 29.9% interest in the station.
• Subsequent to year end, the company announced that it was exploring the possible sale of its Western Canadian broadcasting assets which are located primarily in Alberta. The assets consist of 32 radio stations, six repeater licences and two television stations. At this point, there is no agreement in place to sell these assets and there is no certainty that any transaction will result from the process.
• In December the Board of Directors declared dividends totaling $0.09 per share, bringing the total dividends declared for 2012 to $0.15 per share which was on par with 2011.
