Canadian newspaper giant Postmedia reported Thursday a net loss of $5.1 million in its second quarter, which ended on Feb. 28.
The company owns newspapers across the country, including the Sun Media chain.
It said the result compares to a $1.3 million loss in the same period a year ago.
“Revenue for the quarter was $145.7 million as compared to $157.6 million in the same period in the prior year, a decrease of $11.9 million or 7.5 per cent,” said Postmedia in a news release. “The revenue decline was primarily due to decreases in print advertising revenue of $10.0 million or 14.2 per cent and print circulation revenue of $2.9 million or 5.4 per cent. Digital revenue increased by $1.8 million or 6.9 per cent in the quarter with digital advertising revenue up 10.2 per cent.”
The company said it implemented initiatives during the quarter – including compensation expense reductions, real estate rationalization, production efficiencies and other transformation programs – that are expected to result in approximately $6 million of net annualized cost savings.
“The company intends to continue to identify and undertake ongoing cost reduction initiatives in an effort to address revenue declination in the legacy print business,” said Postmedia.
“Our two pronged strategy – extend our legacy runway and grow digital revenues – is working,” said Andrew MacLeod, president and chief executive officer of Postmedia, in the news release.
“We continue to slow the declines in traditional revenues, deliver results on our business transformation initiatives and reduce our debt. Our success in extending the legacy runway is providing us the time to allow our digital transformation to continue demonstrating traction with its ninth consecutive quarter of double digit digital advertising growth.”
The company said that revenue for the six months ended Feb. 28 was $317 million as compared to $346.6 million in the same period in the prior year, a decrease of $29.6 million or 8.5 per cent. The revenue decline was primarily due to decreases in print advertising revenue of $24 million or 14.9 per cent and decreases in print circulation revenue of $7.5 million or 6.7 per cent. Digital revenue increased by $3.3 million or 5.7 per cent year to date with digital advertising revenue up 8.1per cent, said the media company.
Net loss year to date was $6.5 million as compared to net earnings of $4.5 million in the same period in the prior year.
Mario Toneguzzi is a Troy Media business reporter based in Calgary.