MONTREAL – On Friday, Quebecor Media’s TVA Group reported third quarter net income was off by 66%, at $2.7 million, when compared to Q3 2004..
This decline in net income, says the company, is due mainly to “the significant reduction in income” from its magazine publishing sector, as well as to losses incurred by our new services, such as Mystere, Argent and SUN TV. (TVA Group does not include Quebecor Media’s other publishing division, Sun Media.)
On the bright side, “TVA Network continues to post excellent audience ratings” but much higher content costs caused a slight drop in operating income from the same period a year ago. EBITDA for the third quarter was $4.8 million, compared with $13 million for the same quarter of 2004.
"TVA Group’s lower profitability is the direct result of the strategic decisions we have made in order to maintain our leadership position in our market and build our future," said Pierre Dion, president and CEO of TVA Group. He also cited the company’s aggressive publishing moves in terms of design and pricing.
“In our television sector, Toronto 1 was renamed SUN TV during the quarter and is now offering a brand-new programming lineup, including two new locally produced shows (The Grill Room and Inside Jam) that we are convinced will capture a niche in the Ontario viewing market in the coming months. So the real building of this new Toronto station has officially just begun,” said Dion.
“As for our new digital channels, Mystere is more successful than anticipated and we are continuing our efforts to further improve Argent’s positioning. The significant growth in content costs – and particularly costs for TVA Network’s Canadian content – is very worrisome. We are, however, very proud of the success of TVA Network, which remains far and away the Quebec leader."
Cash flows provided by operations were $13.2 million for the quarter, against $24.5 million for the corresponding year-ago period. This change in cash flows provided by operations is mainly the result of the lower net income for the quarter, said the company.
Expenses in the quarter climbed significantly to $76.2 million by the end of September 2005, as compared to $58.3 million in Q3 ’04.
