MONTREAL – Late Monday, TVA Group announced fourth quarter net income dropped by 50% to $8.7 million, compared with net income of $17.4 million during the fourth quarter of 2004.
This drop "is due to the losses incurred by our new services, the significantly lower operating revenues for the (magazine) publishing business, and the impact of future income taxes following the December 13, 2005, announcement by the Government of Quebec of increases in the corporate tax rate for the taxation years 2006 through 2009," says the press release.
EBITDA (see definition below) for the fourth quarter was $16.8 million, well off from the $25.5 million posted in Q4 ’04. TVA Group’s net income for the year was $28.4 million, a drop of 45%.
"TVA Network posted excellent audience ratings during the quarter, with 17 of the 20 most-watched shows, including Star Academie III," said Pierre Dion, president and CEO. "Our specialty channels, particularly LCN and Mystere, continued to progress and we are very satisfied. SunTV did not attain the viewership anticipated during the quarter, but as planned we are constantly changing and improving its programming content in order to help it find its niche in the very competitive Toronto market.
"The fierce competition that is prevailing in Quebec’s magazine publishing market and our desire to protect our market shares resulted in an operating loss for this sector during the quarter," Dion added. "We are making every effort to alleviate the impact of this competition, while sticking with our strategy. Also, TVA Films had an excellent year in 2005, despite the operating loss reported for the quarter."
Cash flows used by operations were $4.7 million for the fourth quarter, compared with cash flows provided by operations of $10.3 million for the corresponding year-ago period. This change in cash flows is mainly the result of the lower net income reported for the quarter and variations in current income tax assets and liabilities.
