MONTREAL — TVA Group, a subsidiary of Quebecor Media, reported Tuesday it recorded a net loss attributable to shareholders of $2.6 million, or $0.06 loss per share, for the second quarter of 2015. This compares to a net income attributable to shareholders of $9.2 million, or $0.39 earnings per share, in the same quarter of 2014.
The biggest contributing factor to TVA Group’s second-quarter loss was a 97% decline in the operating income of its Broadcasting & Production segment, which reported a $535,000 adjusted operating income in the three-month period ending June 30, as compared to an $18 million adjusted operating income for the same quarter in 2014. In a press release issued to report its latest financial results, TVA Group said the 97% unfavourable variance in its Broadcasting & Production segment’s adjusted operating income was “caused mainly by the higher adjusted operating loss of ‘TVA Sports’, largely related to broadcast of the National Hockey League (‘NHL’) playoffs during the quarter, and a 9.7% decline in advertising revenues at TVA Network.”
While TVA Group’s Broadcasting & Production segment experienced a significant operating income loss in the second quarter, its overall revenues grew to $113.4 million in Q2 2015 as compared to revenues of $94 million in the second quarter of 2014.
“In the second quarter of 2015, the Broadcasting & Production segment’s financial results continued to be affected by higher adjusted operating losses at our sports specialty services caused by the concentration of operating costs related to the NHL playoffs in the second quarter,” Julie Tremblay, President and CEO of Quebecor Media’s Media Group, said in the news release.
“However, we are very encouraged by our total revenues from the sports services. In the second quarter of 2015, the revenues were 6 times more compared to the same quarter of 2014 and reached an important growth of 28.1% compared with our first quarter of 2015, which bodes well for the performance of ‘TVA Sports’ going forward,” Tremblay said.
“At the same time, the advertising environment remains challenging, which is reflected in the 18.0% decline in TVA Network’s adjusted operating income compared with the same quarter of 2014. On the ratings front, TVA Network slightly increased its market share from 21.4% to 22.0%, while its two main rivals lost market share. ‘TVA Sports’, in its first season, as the exclusive broadcaster of French playoffs for the NHL, has become the most watched sports channel in Quebec. During the 12 games of the Montreal Canadiens presented in the playoffs, an average of 1,577,000 viewers, with peaks up to 2.5 million, was reached, representing a market share of 49.1%,” Tremblay said.
Furthermore, Tremblay said she is pleased with the results from TVA Group’s new Film Production & Audiovisual Services segment, which includes the operations of the properties acquired from Vision Globale and its subsidiaries on December 30, 2014. TVA Group’s Film Production & Audiovisual Services segment reported overall revenues of $18.8 million for the three-month period ending June 30, which resulted in an adjusted operating income of $5.6 million in the second quarter for the film production division.
“We are very satisfied with the new Film Production & Audiovisual Services segment’s financial results for the quarter, which measure up to the potential we saw when we made the acquisition. The results were driven by strong numbers for soundstage and equipment leasing for film production. There is every indication that the trend will continue in the coming months. As we hoped, the segment is reducing our sensitivity to fluctuations in advertising revenues,” Tremblay said.
Finally, TVA Group’s Magazines segment reported a $1.2 million adjusted operating income in the second quarter, which represents a 58.6% decrease in income compared to the same quarter in 2014. TVA Group attributes the decline in its Magazines segment primarily to a 20.2% decrease in newsstand revenues and a 10.3% decline in advertising revenues, partially offset by the adjusted operating income generated by the magazines acquired from Transcontinental Inc. on April 12, 2015.
“The corporation will be able to capitalize on the new titles’ contribution and the initially identified synergies as of the third and fourth quarters of this year,” Tremblay said.
