- Second Quarter Revenues increase by 9% and EBITDA grows 15% -
WINNIPEG, April 11 /CNW/ - Canwest Global Communications Corp. ("Canwest
or the "Company") today reported financial results for the second quarter and
six months ended February 29, 2008.- Consolidated revenues for the second quarter were $702 million, an
increase of 9% from $644 million compared to the same quarter last
year. For the six month period revenues were up 8% to $1,570
million from $1,449 million compared to the same period last year.
- Consolidated EBITDA(1) in the second quarter was up 15% to
$92 million, compared to $80 million for the same quarter in 2007.
For the six month period EBITDA was up 9% to $314 million from
$288 million compared to the same period last year. Included in
the six month results are non-recurring restructuring expenses in
the total amount of $16 million. Excluding these costs, EBITDA
would have totaled $330 million for the six month period, an
increase of 15% from the same period last year.
- Reported net earnings for the second quarter were negative
$34 million or negative $0.19 per share, compared to net earnings
of $7 million or $0.04 per share for the same quarter last year.
For the six month period net earnings were $7 million or $0.04 per
share compared to $73 million or $0.41 per share for the same
period last year.
- Excluding the impact of the accretion of long term liabilities,
foreign currency swap gains/losses, and restructuring expenses,
earnings in the second quarter were $4 million or $0.02 per share
up from break even or nil per share for the same quarter last
year. For the six month period, earnings on the same basis were
$95 million or $0.53 per share up from $59 million or $0.33 per
share for the same period last year."Overall our second quarter results were solid, despite overall softening
market conditions in Canada, and the impact of the Writers' strike on Canadian
television. At the half way mark of our fiscal year, our publishing, specialty
television and Australian operations produced strong results. Global and E!
continued to face a challenging advertising and competitive environment
compounded by the impact of the Writers' strike. However, Global was able to
maintain and in fact slightly improve its share of the top 10 shows in the 3
major markets of Toronto, Vancouver and Calgary, in the 18-49 demographic",
commented Leonard Asper, Canwest's President and Chief Executive Officer.
Segmented Results
Publishing
Revenues for the Company's publishing operations for the second quarter
were $306 million, 1% higher than revenues of $303 million for the same period
in fiscal 2007. Publishing EBITDA of $59 million for the year was up 13% from
$52 million in fiscal 2007. For the six months ended February 29, 2008,
revenues were $668 million and EBITDA was $162 million up 3% and 15%
respectively, from similar periods last year. The strong improvements in
EBITDA reflect continued strong focus on cost containment.
Canadian Television combined
Canadian television operations, including CW Media (formerly Alliance
Atlantis broadcast segment) specialty television operations reported in the
second quarter of 2008, revenues of $234 million up from $166 million the
previous year, an increase of 41%. EBITDA increased significantly to
$20 million from $3 million the previous year. For the six months ended
February 29, 2008, reported revenues were $542 million and EBITDA was $90
million up 45% and 125% respectively, from similar periods last year. The
strong increases year over year primarily reflect the acquisition of Alliance
Atlantis.
On a pro forma basis, revenue and adjusted EBITDA of the specialty
operations of Alliance Atlantis, for the three months ended February 28, 2007,
revenue and EBITDA would have decreased 3% from $241 million and 8% from
$22 million. For the six months ended February 29, 2008, revenue and EBITDA
would have both increased 1% from $536 million and $89 million respectively.
Canadian Television
Canadian television operations, excluding the CW Media specialty
television operations reported a second quarter decrease in revenues to
$150 million, down from $166 million and a decrease in EBITDA to negative
$7 million from $3 million for the corresponding periods last year. For the
six months ended February 29, 2008, revenues were $361 million and EBITDA was
$25 million, down 3% and 38% respectively, from similar periods last year. The
lower performances in revenue and EBITDA primarily relate to the impact of the
Writers' strike, which disrupted program schedules and viewing patterns,
partly offset by reduced program expense.
CW Media
The newly acquired specialty television assets reported revenues of
$84 million and EBITDA of $27 million for the second quarter, an increase of
12% on revenue and 43% on EBITDA compared to the same period last year. For
the six months ended February 29, 2008, revenues were $181 million and EBITDA
was $65 million up 12% and 34% respectively, from similar periods last year.
Australian Television
Network TEN's second quarter revenue of $139 million was up 1% from
$138 million during the same quarter in the previous year. TEN's EBITDA of
$35 million was down 6% from the $37 million from the same quarter in fiscal
2007. For the six months ended February 29, 2008, reported revenues were
$381 million and EBITDA was $139 million, up 8% and 12% respectively, from
similar periods last year. Network TEN's results were affected by their
currency relative to the Canadian dollar and costs associated with their new
digital media strategy.Highlights of the second quarter
- Canwest received final approval from the CRTC regarding the
acquisition of the specialty television assets of Alliance. Those
assets which were acquired in August, 2007, were being held in
trust pending a public hearing and decision from the Commission.
On December 20, 2007, the CRTC conditionally approved the
transaction and the change of control to Canwest. The Company
completed the filing of all amendments and information requested
and on January 18, 2008 the CRTC issued final approval.
- Canwest Publishing, led by online classified advertising, local
online display and FPInfomart, delivered overall growth in online
digital revenue of 17% for the quarter.
- National Post received third highest number of awards (51 awards)
in the world in the 29th annual Best of Newspaper Design Creative
Competition, as well as recording improved financial results over
last year.
- Canwest launched the Ottawa based national newscast and Canwest
News Service.
- Turkey radio delivered strong top line revenue growth of 5% in the
quarter and EBITDA growth of 54%.
- During the second quarter, Global TV, increased the number of top
10 shows in the 18-49 year old demographic with four of the top 10
shows in Toronto and Vancouver, and in Calgary had five of the top
10 shows compared to the same period last year.
- TVtropolis specialty channel jumped up six places to number three
in top 10 analog channels compared to same period last year.
- Network TEN in Australia reported its strongest start to a ratings
year since OzTAM ratings began in 2001. It was number one in
18-49 year old demographic and number one, for the second year in
a row, in all demographics for daytime viewing.
- During the quarter, Canwest received an interim dividend from
Ten Network Holdings of $46 million.Outlook:
As we move into the second half of 2008 we anticipate improvement in
overall operating results. This, in large part will depend upon the state of
the advertising market during the second half of fiscal 2008 and the influence
of the upcoming Summer Olympic Games.
At Canadian broadcasting, the second half of fiscal 2008 will feature a
spring schedule that will include all new episodes of House, My name is Earl,
The Simpsons, Family Guy, NCIS, The Office, Bones, Numbers, Brothers and
Sisters. The strong performance of the newly acquired television assets in
Canada validates the strategy of diversifying into higher growth media. For
the balance of fiscal 2008 and beyond, the Company will focus on integrating
the recently acquired specialty broadcasting assets and ensuring these premier
brands deliver on the promise of re-balancing the revenue streams of our
broadcasting group in order to spur renewed growth. We remain committed to
developing solutions, both regulatory and competitively, to address the issues
facing Global and E!
Forward-Looking Statements:
This news release contains certain comments or forward-looking statements
about the objectives, strategies, financial conditions, results of
operations and businesses of CanWest. Statements that are not historical
facts are forward-looking and are subject to important risks,
uncertainties and assumptions. These statements are based on our current
expectations about our business and the markets in which we operate, and
upon various estimates and assumptions. The results or events predicted
in these forward-looking statements may differ materially from actual
results or events if known or unknown risks, trends or uncertainties
affect our business, or if our estimates or assumptions turn out to be
inaccurate. As a result, there is no assurance that the circumstances
described in any forward-looking statement will materialize. Significant
and reasonably foreseeable factors that could cause our results to differ
materially from our current expectations are discussed in the section
entitled "Risk Factors" contained in our Annual Information Form for the
year ended August 31, 2007 dated November 20, 2007 filed by CanWest
Global Communications Corp. with the Canadian securities commissions
(available on SEDAR at www.sedar.com), as updated in our most recent
Management's Discussion and Analysis for the three and six months ended
February 29, 2008. We disclaim any intention or obligation to update any
forward-looking statement even if new information becomes available, as a
result of future events or for any other reason.
The Company's financial statements and Management's Discussion and
Analysis for three and six months ended February 29, 2008 are available on the
Company's website: www.canwest.com. Financial statements and Management's
Discussion and Analysis for three and six months ended February 29, 2008 for
Canwest Limited Partnership can be found also on www.canwest.com. Financial
statements for Ten Network Holdings Limited can be found at
www.tencorporate.com.au.
The Company will hold its regular quarterly conference call with analysts
on April 11, 2008 at 10:00 a.m. Eastern Standard Time. The call-in numbers are
416-644-3414 or 800-733-7571. Replays are also available for five days
following the call at 416-640-1917 or 877-289-8525 (using the pass-code
21266282 followed by the pound sign.)
About Canwest Global Communications Corp.
Canwest Global Communications Corp. (www.canwest.com), (TSX: CGS and
CGS.A,) an international media company, is Canada's largest media company. In
addition to owning the Global Television Network, Canwest is Canada's largest
publisher of English language daily newspapers and owns, operates and/or holds
substantial interests in conventional television, out-of-home advertising,
specialty cable channels, web sites and radio stations and networks in Canada,
New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and
the United States.CANWEST GLOBAL COMMUNICATIONS CORP.
BUSINESS SEGMENT INFORMATION
(unaudited)
(in thousands of Canadian dollars)
For the three For the six
months ended months ended
------------------------------------------
February February February February
29, 2008 28, 2007 29, 2008 28, 2007
REVENUE
Publishing 306,465 302,564 668,371 646,431
------------------------------------------
Television
Canada 150,496 166,066 361,288 373,962
CW Media 83,770 - 180,897 -
------------------------------------------
234,266 166,066 542,185 373,962
Australia 138,652 137,537 380,988 353,397
------------------------------------------
Total Television 372,918 303,603 923,173 727,359
------------------------------------------
Radio
Turkey 3,346 3,179 6,910 6,564
United Kingdom 458 277 846 511
------------------------------------------
Total radio 3,804 3,456 7,756 7,075
------------------------------------------
Out-of-home 39,070 34,846 81,357 70,374
Intersegment revenues (738) (786) (2,276) (2,699)
------------------------------------------
721,519 643,683 1,678,381 1,448,540
Elimination of equity
accounted affiliates (19,644) - (108,767) -
------------------------------------------
CONSOLIDATED REVENUE 701,875 643,683 1,569,614 1,448,540
------------------------------------------
------------------------------------------
SEGMENT OPERATING PROFIT
Publishing 59,367 52,356 161,532 140,110
------------------------------------------
Television
Canada (7,182) 2,808 25,068 40,489
CW Media 27,395 - 64,527 -
------------------------------------------
20,213 2,808 89,595 40,489
Australia 35,101 37,385 138,606 124,082
------------------------------------------
Total Television 55,314 40,193 228,201 164,571
------------------------------------------
Radio
Turkey 1,093 708 2,677 1,898
United Kingdom (1,837) (1,099) (3,127) (1,922)
------------------------------------------
Total radio (744) (391) (450) (24)
------------------------------------------
Out-of-home 1,706 (2,542) 4,848 2,484
Corporate and other (9,239) (9,632) (18,751) (18,657)
Restructuring expenses (4,611) - (16,256) -
------------------------------------------
101,793 79,984 359,124 288,484
Elimination of equity
accounted affiliates (9,549) - (44,964) -
------------------------------------------
OPERATING PROFIT (EBITDA)(1) 92,244 79,984 314,160 288,484
------------------------------------------
------------------------------------------
(1) EBITDA is defined as earnings before interest, income taxes,
amortization of intangibles, amortization of property, and equipment,
other amortization, interest rate and foreign currency swap gains
(losses), accretion of long term liabilities, interest income,
amortization of deferred financing costs, foreign exchange gains
(losses), investment gains, losses and write-downs, minority interest,
interest in earnings of equity accounted affiliates, realized currency
translation adjustments and earnings from discontinued operations. This
supplementary earnings measure does not have a standardized meaning
prescribed by Canadian generally accepted accounting principles and may
not be comparable to similar measures presented by other companies nor
should it be viewed as an alternative to net earnings. The reconciliation
of EBITDA to net earnings is evident on the face of the following
consolidated statements of earnings.
CANWEST GLOBAL COMMUNICATIONS CORP.
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(UNAUDITED)
(In thousands of Canadian dollars except as otherwise noted)
For the three For the six
months ended months ended
------------------------------------------
February February February February
29, 2008 28, 2007 29, 2008 28, 2007
Revenue 701,875 643,683 1,569,614 1,448,540
Operating expenses 393,105 365,248 811,528 762,121
Selling, general and
administrative expenses 211,915 198,451 427,670 397,935
Restructuring expenses 4,611 - 16,256 -
------------------------------------------
92,244 79,984 314,160 288,484
Amortization of intangibles 2,217 1,485 4,648 2,523
Amortization of property and
equipment 28,528 23,909 53,458 45,911
Other amortization 339 426 632 997
------------------------------------------
Operating income 61,160 54,164 255,422 239,053
Interest expense (77,769) (43,497) (160,204) (85,716)
Accretion of long term
liabilities (24,197) - (48,078) -
Interest income 3,414 829 19,789 2,409
Amortization of deferred
financing costs - (1,467) - (3,878)
Interest rate and foreign
currency swap gains (losses) (13,171) 12,221 (40,930) 21,000
Foreign exchange gains (losses) (1,806) 3,816 4,275 6,693
Investment gains, losses and
write-downs (332) 707 2,536 717
------------------------------------------
(52,701) 26,773 32,810 180,278
Provision for (recovery of)
income taxes (10,313) 7,000 25,610 60,293
------------------------------------------
Earnings (loss) before the
following (42,388) 19,773 7,200 119,985
Minority interest (10,167) (16,258) (38,846) (57,437)
Interest in earnings of equity
accounted affiliates 19,741 958 39,577 1,321
Realized currency translation
adjustments (1,062) 1,025 (1,062) 600
------------------------------------------
Net earnings (loss) from
continuing operations (33,876) 5,498 6,869 64,469
Earnings from discontinued
operations - 1,565 - 8,957
------------------------------------------
Net earnings (loss) for
the period (33,876) 7,063 6,869 73,426
------------------------------------------
------------------------------------------
Earnings (loss) per share
from continuing operations:
Basic ($0.19) $0.03 $0.04 $0.36
Diluted ($0.19) $0.03 $0.04 $0.36
Earnings (loss) per share:
Basic ($0.19) $0.04 $0.04 $0.41
Diluted ($0.19) $0.04 $0.04 $0.41
For further information: Media Contact: Dervla Kelly, Director,
Corporate Communications, Tel: (416) 442-3807, dekelly@canwest.com; Investor
Contact: Hugh Harley, Director, Investor Relations, Tel: (204) 956-2025,
hharley@canwest.com; John Maguire, Chief Financial Officer, Tel: (204)
956-2025, jmaguire@canwest.com
