Postmedia CEO Paul Godfrey speaks during the company’s annual general meeting in Toronto. (Photo by THE CANADIAN PRESS)

Postmedia reports $5.8M profit as digital gains fail to match print revenue drop

Revenue from Postmedia Network Canada Corp.’s printed publications continued to fall faster than digital revenue grew as the company reported a smaller quarterly profit on Thursday.

Canada’s largest newspaper chain said it earned $5.8 million, or six cents per share for the quarter ended Nov. 30, compared with a profit of $17.8 million or 10 cents per share a year ago when it benefited from a gain on debt settlement.

Revenue for what was the first quarter of the company’s financial year fell 10.3 per cent to $189 million, compared with $210.8 million a year ago.

“We’re absolutely committed to doing … what we can to keep telling the stories important to Canadians in communities across our country as we transition to a new business model,” executive chairman and CEO Paul Godfrey said on a conference call.

“Looking ahead, we will continue to look for savings and explore every aspect of revenue generation in our evolving business strategy.”

A digital revenue gain of 14.5 per cent or $4 million was more than offset by a print advertising decline of 17.9 per cent or $19.9 million and a print circulation revenue drop of 6.1 per cent or $3.8 million in the three-month period, the Toronto-based company said.

Godfrey said digital advertising was up 17.3 per cent, a double-digit percentage gain for a fourth straight quarter, which shows its strategy to transition from print to online news is working but needs more time to grow.

Postmedia (TSX:PNC.A, TSX:PNC.B) and Torstar Corp. (TSX:TS.B) announced on Nov. 27 a non-cash deal to trade 41 newspapers and close 36 of them, mainly in Ontario regions served by multiple publications, at a cost of nearly 300 jobs.

On Thursday, Postmedia said it had recognized a gain of $4.7 million on disposal of the operations, representing the difference between fair value of the assets acquired and the carrying value of the net liabilities sold. It said it would also book restructuring and acquisition expenses of $5.1 million for the transaction.

It added the estimated “fair value” of all 41 newspapers in the deal was $3.5 million.

It said all but one of the 22 community newspapers it acquired — the Exeter Times-Advocate — will be closed by this month. It also bought and closed two free commuter daily newspapers.

During the quarter, Postmedia reported operating expenses fell $26 million or 13.6 per cent compared with the year-earlier period — it said compensation costs alone were $19.1 million lower.

It said a new round of cost-cutting initiatives that began in September had already trimmed $14 million from future annual operating costs as of Nov. 30.

Just Posted

Women’s marches underway in Canadian cities, a year after Trump inauguration

Women are gathering in dozens of communities across the country today to… Continue reading

Red Deer councillor balks at city getting stuck with more funding responsibilities

Volunteer Central seeks municipal funding after being cut off by government

Olds chicken barn burns to the ground, no livestock harmed

More than 100,000 chickens were saved as fire crews prevent the blaze from spreading

Bear video meant to promote conservation: zoo owner

Discovery Wildlife Park says it will look at other ways to promote its conservation message

WATCH: Setters Place grand opening in Red Deer

Red Deer’s Setters Place officially opened to the public Saturday afternoon.… Continue reading

In photos: Get ready for Western Canadian Championships

Haywood NorAm Western Canadian Championships and Peavey Mart Alberta Cup 5/6 start… Continue reading

WATCH: Red Deer city council debates cost-savings versus quality of life

Majority of councillors decide certain services are worth preserving

Got milk? Highway reopened near Millet

A southbound truck hauling milk and cartons collided with a bridge

Stettler’s newest residents overcame fear, bloodshed to come here

Daniel Kwizera, Diane Mukasine and kids now permanent residents

Giddy up: Red Deer to host Canadian Finals Rodeo in 2018

The CFR is expected to bring $20-30 million annually to Red Deer and region

Ice dancers Virtue and Moir to carry flag at Pyeongchang Olympics

Not since Kurt Browning at the 1994 Lillehammer Games has a figure… Continue reading

Beer Canada calls on feds to axe increasing beer tax as consumption trends down

OTTAWA — A trade association for Canada’s beer industry wants the federal… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month