Canwest Global Communications Corp. Reports Third Quarter 2008 Results



    - Third Quarter Revenues increase by 15% and EBITDA grows 45% -

    - Specialty channels continue to deliver double digit growth -

    WINNIPEG, July 11 /CNW/ - Canwest Global Communications Corp. ("Canwest"
or the "Company") today reported financial results for the third quarter and
nine months ended May 31, 2008.
    These results mark the Company's sixth consecutive quarter with business
performance and revenue growth of more than 7%. Since November 30, 2006,
revenues have increased on average more than 10% each quarter including 15%
for the period ending May 31, 2008.

    
    -------------------------------------------------------------------------
    in millions of                      Three months          Nine months
     dollars, except                    ended May 31          ended May 31
     per share amounts              -----------------------------------------
                                       2008       2007       2008       2007
    -------------------------------------------------------------------------
    Reported Results
    -------------------------------------------------------------------------
      Revenues                          852        738      2,422      2,187
    -------------------------------------------------------------------------
      EBITDA                            177        122        491        410
    -------------------------------------------------------------------------
      Earnings                          (28)         8        (22)        82
    -------------------------------------------------------------------------
      Basic EPS                       (0.16)      0.05      (0.12)      0.46
    -------------------------------------------------------------------------
    Adjusted Results
    -------------------------------------------------------------------------
      Earnings                           13         13         52         56
    -------------------------------------------------------------------------
      Basic EPS                        0.07       0.07       0.29       0.32
    -------------------------------------------------------------------------
    (*) Adjusted Results exclude the impact of foreign currency and interest
        swap gains/losses, foreign exchange gains/losses, investment gains,
        losses and writedowns, restructuring expenses, discontinued
        operations and related income tax effect.
    


    "These solid results demonstrate that we continue to experience growth
even in the face of a softening market," said Leonard Asper, Canwest's
President and Chief Executive Officer. "Given the diversity and strength of
our properties we believe that Canwest's stock is undervalued.
    "All major operations experienced profit growth in the quarter," Asper
added. "Our specialty channels continue to grow both in terms of popularity
and revenue generation and our publishing assets are also performing ahead of
any other similar assets in North America. We continue to focus on taking
advantage of our size and scope by generating increasing and identifiable
audiences, from which to monetize content, while rationalizing our cost
structure, to deliver better value to our shareholders."

    Segmented Results

    Publishing

    Revenues for the Company's publishing operations for the third quarter of
$334 million, were slightly higher than revenues for the same period in fiscal
2007. Publishing EBITDA of $79 million for the third quarter was up 10% from
$72 million for the same period in fiscal 2007. For the nine months ended
May 31, 2008, revenues were $1,003 million and EBITDA was $240 million, up 2%
and 13% respectively, from similar periods last year. The double digit growth
in EBITDA continues to reflect the focus on cost containment within the
publishing operations.

    Canadian Television combined

    Canadian television operations, including CW Media (formerly Alliance
Atlantis broadcast segment) specialty television operations reported third
quarter revenues of $281 million, an increase of 54% from $182 million for the
previous year. EBITDA more than doubled to $76 million from $31 million the
previous year. For the nine months ended May 31, 2008, reported revenues were
$823 million and EBITDA was $165 million, up 48% and 131% respectively, from
the same period last year. The strong year over year increases primarily
reflect the acquisition of the specialty operations of Alliance Atlantis.
    Canadian television operations, including revenue and adjusted EBITDA of
the specialty operations of Alliance Atlantis on a pro forma basis for the
three months ended May 31, 2007, revenue and EBITDA would have increased 5%
from $267 million and 40% from $54 million. For the nine months ended May 31,
2008, revenue and EBITDA increased 3% from $803 million and 16% from
$143 million respectively over the prior year on a pro forma basis.

    Canadian Television

    Canadian television operations, excluding the CW Media specialty
television operations reported third quarter revenues of $183 million,
slightly ahead of revenues for the same period in fiscal 2007. EBITDA of
$39 million was up 25% from $31 million for the corresponding period last
year. For the nine months ended May 31, 2008, revenues were $544 million and
EBITDA was $64 million, down 2% and 11% respectively, from the same period
last year. The lower performances in revenue and EBITDA for the nine month
period primarily relate to the impact of the Writers' strike which disrupted
program schedules and viewing patterns. This was partly offset by reduced
program expense and a recovery in revenues in the third quarter as the program
schedule and viewing patterns returned. The group continues to experience
strong growth in its specialty television assets.

    CW Media

    The CW media specialty television assets reported revenues of $99 million
and EBITDA of $38 million for the third quarter, an increase of 16% on revenue
and 60% on EBITDA compared to the same period last year. For the nine months
ended May 31, 2008, revenues were $279 million and EBITDA was $101 million up
13% and 42% respectively, from similar periods last year. Advertising revenues
were up significantly in the quarter and for the nine month period, reflecting
industry leading growths of 23% and 18% respectively.

    Australian Television

    Network TEN's third quarter revenue of $194 million was up 8% from
$180 million during the same quarter in the previous year. TEN's EBITDA of
$35 million was up 21% from the $29 million from the same quarter in fiscal
2007. For the nine months ended May 31, 2008, reported revenues were
$575 million and EBITDA was $173 million, up 8% and 13% respectively, from
similar periods last year.

    
    Highlights of the third quarter and subsequent period

    -   Canwest Publishing, led by local online display, Canada.com and
        FPinfomart, delivered overall growth in online digital revenue of 16%
        for the quarter.

    -   The appointment of Graham Moysey to the position of Senior Vice
        President and General Manager, Digital Media demonstrates Canwest's
        commitment to developing strategic solutions for digital media.

    -   Canwest Publishing announced a partnership with the Vancouver
        Organizing Committee to deliver content related to 2010 Winter Games.

    -   Despite the schedule disruption of the writers' strike, Global TV,
        for the winter and spring season, increased the number of top 10
        shows in the 18-49 year old demographic with four of the top 10 shows
        in Toronto and five of the top 10 shows in Vancouver, and in Calgary
        maintained the number of top 10 shows compared to the same period
        last year. House, Survivor, and Prison Break continue to be top 10
        players.

    -   Slice, TvTropolis and Food TV specialty analog channels all moved up
        in rankings compared to the winter spring season last year.

    -   Canwest maintained its dominance in the specialty digital channels
        with eight of the top 10 channels up from seven of the top 10
        channels last year.

    -   Canwest was recognized 41 times at the 2008 PROMAX & BDA Awards in
        New York City. The awards honour international marketing and design
        achievement in broadcasting.

    -   Network TEN in Australia reported a solid third quarter with improved
        ratings performance in the key 16-39 and 18-49 demographics, while
        continuing to grow digital revenues.

    -   Ten Network Holdings declared a semi-annual dividend of A$0.035 per
        share on June 25, 2008, payable on July 16, 2008. This represents a
        dividend of approximately A$18 million for Canwest.

    -   Ten Network Holdings announced its intention to buyback up to
        approximately 10% of its issued shares over the next 12 months.
        Canwest has indicated it will not participate in the share buyback at
        this time.

    -   On July 3, 2008 Canwest announced CW Media completed a private
        offering of US$312 million (approximately C$318 million) Senior Notes
        of which the net proceeds, together with cash on hand, was used to
        repay approximately US$331 million outstanding under CW Media's
        interim and term senior unsecured credit facility. The credit
        facility had been established in connection with Canwest's
        acquisition of the broadcast operations of Alliance Atlantis in
        August 2007.
    

    Outlook:

    We remain optimistic that operating results in fiscal 2008 will be
improved over last year. This performance will be led by our Publishing Group,
the specialty television networks and EYE Corp. While the performance of our
conventional television business will be somewhat dependent on advertising
markets and in particular the impact of the Olympic Games in the fourth
quarter, we continue to work on strategies to improve the overall business
model going forward.
    In the third quarter and subsequent period, the Company closed four
smaller unprofitable operations and will continue to assess its asset base to
ensure it is operating and investing in the assets that have the most
potential. Following a review of strategic alternatives, the Company
determined its United Kingdom radio properties are no longer core and is
pursuing the sale of one or more of these stations. There is no certainty as
to the outcome of this process.

    Forward-Looking Statements:

    This news release contains certain 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 nine months
ended May 31, 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 nine months ended May 31, 2008 are available on the
Company's website: www.canwest.com. Financial statements and Management's
Discussion and Analysis for three and nine months ended May 31, 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 July 11, 2008 at 11:00 a.m. Eastern Time. The call-in numbers are
416-644-3416 or 800-732-9307. Replays are also available for seven days
following the call at 416-640-1917 or 877-289-8525 (using the pass-code
21274264 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 nine
                                       months ended          months ended
                                      --------------        --------------
                                    May 31,    May 31,    May 31,    May 31,
                                     2008       2007       2008       2007
    REVENUE

    Publishing                      334,151    333,609  1,002,522    980,040
                                  ---------- ---------- ---------- ----------
    Television
      Canada                        182,658    182,045    543,946    556,007
      CW Media                       98,542          -    279,439          -
                                  ---------- ---------- ---------- ----------
                                    281,200    182,045    823,385    556,007
      Australia                     194,134    179,712    575,122    533,109
                                  ---------- ---------- ---------- ----------
    Total Television                475,334    361,757  1,398,507  1,089,116
                                  ---------- ---------- ---------- ----------
    Radio
      Turkey                          3,974      4,429     10,884     10,993
      United Kingdom                    503        328      1,349        839
                                  ---------- ---------- ---------- ----------
    Total radio                       4,477      4,757     12,233     11,832
                                  ---------- ---------- ---------- ----------

    Out-of-home                      40,750     38,674    122,107    109,048
    Intersegment revenues            (2,916)      (704)    (5,192)    (3,403)
                                  ---------- ---------- ---------- ----------
                                    851,796    738,093  2,530,177  2,186,633

    Elimination of equity
     accounted affiliates                 -          -   (108,767)         -
                                  ---------- ---------- ---------- ----------

    CONSOLIDATED REVENUE            851,796    738,093  2,421,410  2,186,633
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    SEGMENT OPERATING PROFIT

    Publishing                       78,636     71,662    240,168    211,772
                                  ---------- ---------- ---------- ----------

    Television
      Canada                         38,633     30,940     63,701     71,429
      CW Media                       37,488          -    101,491          -
                                  ---------- ---------- ---------- ----------
                                     76,121     30,940    165,192     71,429
      Australia                      34,747     28,676    173,353    152,758
                                  ---------- ---------- ---------- ----------
    Total Television                110,868     59,616    338,545    224,187
                                  ---------- ---------- ---------- ----------
    Radio
      Turkey                          1,802      1,960      4,479      3,858
      United Kingdom                 (1,965)    (1,066)    (5,092)    (2,988)
                                  ---------- ---------- ---------- ----------
    Total radio                        (163)       894       (613)       870
                                  ---------- ---------- ---------- ----------

    Out-of-home                       1,124     (1,229)     5,972      1,255
    Corporate and other              (9,269)    (9,403)   (28,020)   (28,060)
    Restructuring expenses           (4,018)         -    (20,274)         -
                                  ---------- ---------- ---------- ----------
                                    177,178    121,540    535,778    410,024

    Elimination of equity
     accounted affiliates                 -          -    (44,440)         -
                                  ---------- ---------- ---------- ----------

    OPERATING PROFIT (EBITDA)(1)    177,178    121,540    491,338    410,024
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    (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 nine
                                       months ended          months ended
                                      --------------        --------------
                                    May 31,    May 31,    May 31,    May 31,
                                     2008       2007       2008       2007

    Revenue                         851,796    738,093  2,421,410  2,186,633
    Operating expenses              438,581    410,070  1,250,109  1,172,191
    Selling, general and
     administrative expenses        232,019    206,483    659,689    604,418
    Restructuring expenses            4,018          -     20,274          -
                                  ---------- ---------- ---------- ----------
                                    177,178    121,540    491,338    410,024
    Amortization of intangibles       2,191      1,511      6,839      4,034
    Amortization of property
     and equipment                   29,297     23,401     82,755     69,312
    Other amortization                  177        326        809      1,323
                                  ---------- ---------- ---------- ----------
    Operating income                145,513     96,302    400,935    335,355
    Interest expense                (78,722)   (45,333)  (238,926)  (131,049)
    Accretion of long term
     liabilities                    (26,274)         -    (74,352)         -
    Interest income                   1,149        785     20,938      3,194
    Amortization of deferred
     financing costs                      -     (1,503)         -     (5,381)
    Interest rate and foreign
     currency swap losses           (19,842)   (21,931)   (60,772)      (931)
    Foreign exchange gains
     (losses)                           944     (2,124)     5,219      4,569
    Investment gains, losses
     and write-downs                (24,738)     8,938    (22,202)     9,655
                                  ---------- ---------- ---------- ----------
                                     (1,970)    35,134     30,840    215,412
    Provision for income taxes       17,301      8,251     42,911     68,544
                                  ---------- ---------- ---------- ----------
    Earnings (loss) before
     the following                  (19,271)    26,883    (12,071)   146,868
    Minority interest                (9,242)   (21,663)   (48,088)   (79,100)
    Interest in earnings of
     equity accounted affiliates        129        115     39,706      1,436
    Realized currency translation
     adjustments                          -        (35)    (1,062)       565
                                  ---------- ---------- ---------- ----------
    Net earnings (loss) from
     continuing operations          (28,384)     5,300    (21,515)    69,769
    Earnings from discontinued
     operations                           -      3,145          -     12,102
                                  ---------- ---------- ---------- ----------
    Net earnings (loss)
     for the period                 (28,384)     8,445    (21,515)    81,871
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Earnings (loss) per share
     from continuing operations:
      Basic                          ($0.16)     $0.03     ($0.12)     $0.39
      Diluted                        ($0.16)     $0.03     ($0.12)     $0.39
    Earnings (loss) per share:
      Basic                          ($0.16)     $0.05     ($0.12)     $0.46
      Diluted                        ($0.16)     $0.05     ($0.12)     $0.46
    





For further information:

For further information: Media Contact: John Douglas, Vice President,
Public Affairs, Tel: (204) 956-2025, jdouglas@canwest.com; Investor Contact:
Hugh Harley, Director, Investor Relations, Tel: (204) 956-2025,
hharley@canwest.com

Organization Profile

CANWEST

More on this organization

News - Media

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890