MONTREAL – Quebecor-controlled TVA Group Monday reported second-quarter profits of $13.8 million, compared with $11.7 million, a year ago. Revenues grew to $117.5 million from $110.9 million. Its television sector however reported a $3.7 million drop in operating revenue, or 16.1%, compared with the same quarter of the previous year.
It attributed the losses primarily to operating expenses of its new specialty services, Sun News and Mlle, which launched in the second quarter of 2011. The loss was partially offset by a 3.9% increase in operating income at TVA Network due in large part to a 9.6% increase in advertising revenues. TVA also reported improved operating expenses at the former conventional station "Sun TV" following the launch of the new Sun News specialty service. This resulted in 19.9% decrease in the publishing sector’s operating income, from $3.83 million in the second quarter of 2010 to $3.07 million in the second quarter of 2011.
"The launch of our two new specialty services, Sun News and Mlle, largely accounts for the decline in our operating income in the second quarter of 2011," said Pierre Dion, president and CEO of the Corporation.
"This was however part of our strategy of investing in content and launching new specialty services to take advantage of opportunities in the fast-changing industry environment. During the last quarter, we also announced the creation of our new sports specialty service, TVA Sports, which will launch in September 2011. The new channels will help boost TVA Group’s overall television market share in the years to come. During the last quarter, advertising revenues were up 9.6% at TVA Network and 27.7% at our specialty services. Subscription revenues grew 13.4%. The revenue increases enable us to push ahead with our investment strategy while reducing the short-term impact on our results."
Dion added that TVA’s publishing sector registered a 5% increase in advertising revenues during the last quarter.
“However, an overlap in government assistance programs in 2010, which did not recur in 2011, and lower newsstand revenues caused a decrease in operating income in the second quarter of 2011," noted Dion.
