TORONTO – Corus Radio took a bit of a hit in fiscal 2006, company execs said Thursday while reporting the parent company’s year-end results.
"We had another excellent quarter for our television division, driven by strong ratings and subscriber growth for our brands. Our content business continued to post positive results and radio remained strong outside Québec, where we are integrating newly acquired stations," said Corus Entertainment president and CEO John Cassaday.
Consolidated revenues for the fourth quarter ended August 31, 2006 were $185 million, up 6% from last year’s Q4. Consolidated segment profit was $44.5 million, up 5% from $42.6 million last year. Net income for the quarter was $46.6 million, compared to income of $9.7 million last year. Net income for the quarter was positively impacted by approximately $37 million in income tax rate changes and other income tax items.
Corus Television contributed quarterly revenues of $94.7 million, up 13% from $83.4 million last year, led by continued specialty advertising growth of 20% and subscriber growth of 12%. Quarterly segment profit increased to $34.1 million, up 11% from $30.8 million last year.
Corus Radio revenues were $66.3 million, up 2% from $65.3 million last year. Segment profit was $15.8 million, essentially unchanged from the prior year. On a same station* basis, both revenues and segment profit were up by approximately 4%.
During the company’s call with financial analysts, execs tackled the company’s profitability issues in Quebec and the hit the company’s Toronto cluster took in 2006. Look for some cost-cutting in La Belle Province. "Quebec is not doing as we had hoped," said radio division president John Hayes, who added the company needs to "get our arms and our heads around controlling the costs there."
In Toronto, while Corus’ Q107 and Edge 102.9 held their ratings for the most part, Hayes cited a marketing strategy implemented by Rogers Radio’s four stations (680 News, Fan 590, CHFI and Jack-FM) for a bit of a hit on Corus’ Toronto cluster (which also includes 640 AM Toronto). It was "a very clever sales strategy by Rogers and their four stations that caused us to underperform the Toronto market by just a little bit," said Hayes.
"We think that Rogers’ scheme is so clever that we’ve copied it," he added, without expanding on what it was, specifically.
Corus content revenues were $26.8 million, down 4% from $28 million last year. Segment profit was $2.6 million, compared to $1.8 million last year.
Consolidated revenues for the year ended August 31, 2006 were $726.3 million, up 6% from last year. Consolidated segment profit was $214.1 million, up 10% from $195.3 million last year.
Net income for the year was $35.5 million, compared to $71.1 million in 2005, as the company recorded a $132 million pre-tax debt refinancing charge related to the purchase of its senior subordinated notes and the termination of cross-currency agreements associated with those notes in the second quarter of fiscal 2006.
Corus Television, led by specialty advertising growth of 14% and subscriber growth of 10%, contributed full year revenues of $393.3 million, up 11% from last year. Movie Central increased its subscriber base from 748,000 at August 31, 2005 to 822,000 at the end of the fiscal year. Full year segment profit increased to $164.2 million, up 17% from $140.8 million last year.
Corus Radio revenues during fiscal 2006 were $268.4 million, up 6% from $252.7 million last year. Segment profit was $68.4 million, down 1% from $69.0 million last year. Revenue and segment profit were impacted by the sale of Corus’ Red Deer assets and the multi-station swap in the province of Québec. On a same station basis, revenues were up 6% and segment profit was up by approximately 7%.
Corus Content revenues were $72.1 million, down 12% from ’05. Segment profit was $5.6 million, compared to $3.6 million last year. Revenues were down in fiscal 2006 as fewer episodes were delivered and Beyblade merchandising revenues declined towards the end of fiscal 2005. The division continues to generate positive cash flow.
– Greg O’Brien
