CanWest counts on Ten Network for increased profit

We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.

Advertisement

This was published 19 years ago

CanWest counts on Ten Network for increased profit

CanWest Global Communications, Canada's largest media company, said third-quarter earnings rose fourfold, fuelled by higher profit at its Australian television business and lower interest expenses.

The company said net income was $C54.3 million ($56.7 million) in the quarter ended May 31, up from $C12.5 million a year earlier. Sales rose 1.1 per cent to $C564.6 million from C$558.5 million.

CanWest's stake in Ten Network helped compensate for stagnant Canadian TV and newspaper sales. Interest expenses declined after CanWest refinanced bank debt.

"The only negative was Canadian broadcasting," said Benoit Dube, an analyst at CTI Capital in Montreal, who has a "market overweight" rating on CanWest. "There's a lot of work to do," he said.

Ten Network contributed profit of $C20.6 million in the quarter, up 66 per cent from $C12.4 million a year ago. CanWest controls Ten Network with a 57 per cent stake.

Advertisement

Ten last month reported that its third-quarter earnings before interest, taxes, depreciation and amortisation rose 40 per cent as higher audience ratings boosted advertising sales. Ten has said sales may be hurt this quarter by Seven Network's broadcast rights to the Olympics Games in Athens.

CanWest's chief executive, Leonard Asper, is reacting to slowing newspaper revenue by cutting costs. Sales at CanWest's newspapers fell to $C299.7 million from $C300.6 million, but earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 3.5 per cent to $C74.3 million.

The Canadian TV business's revenue fell to $C207.5 million from $C207.6 million. Its EBITDA fell 26 per cent to $C61.3 million, paring the margin to 29.5 per cent.

"The Canadian TV business was fairly disappointing on the margin side," said Anthony Hammill, from AIC, which held nearly 10.6 million CanWest shares as of March.

CanWest's Global Television Network is trailing BCE's CTV in audience ratings, on BBM Canada data.

Mr Asper said in an interview in April that he planned to spend more in fiscal 2005 to develop shows for the Canadian TV stations in an effort to revive sales. He said CanWest would have a "stronger" schedule in fiscal 2005.

CanWest has been selling assets to reduce $C3.2 billion in debt that it took on when it bought 140 newspapers from Hollinger in 2000.

Earlier this month it sold 30 per cent of its New Zealand radio and television unit in an initial public offering. EBITDA at its NZ business, CanWest MediaWorks (NZ), rose 60 per cent in the nine months ended May 31.

Bloomberg

Most Viewed in Business

Loading