Red ink flows at media chain

Canwest Global Communications Corp. (TSX:CGS) has reported a quarterly net loss of $1.44 billion including a $1.19-billion writedown of assets, mostly in its newspapers.

TORONTO — Canwest Global Communications Corp. (TSX:CGS) has reported a quarterly net loss of $1.44 billion including a $1.19-billion writedown of assets, mostly in its newspapers.

Revenue was $637 million in Canwest’s second quarter ended Feb. 28, down by 10 per cent from $701 million a year earlier.

The net loss, worth $8.09 per share, compared with a year-ago loss of $34 million, 19 cents per share.

The owner of the Global TV network and the former Southam chain of big-city daily newspapers and the National Post said Thursday its operating profit for the quarter fell to $15 million from $95 million.

The writedown is Canwest’s second massive hit to the bookkeeping value of its holdings in six months, following a $1-billion charge in the fourth quarter on goodwill and licences in the television division.

The latest impairments, 83 per cent related to the publishing group, included goodwill, intangible assets and property and equipment, Canwest said, and “are consistent with those of other media organizations throughout North America and which reflect lower future profit expectations as a result of the current outlook for advertising in the operations.”

The Winnipeg-headquartered company, struggling to avoid insolvency under $3.9 billion of debt, stressed that the asset writedowns are non-cash charges “that do not affect Canwest’s liquidity, cash flows from operating activities, debt covenants or have any impact on future operations.”

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