Postmedia loss shrinks as cost cutting tempers print revenue decline
Postmedia Network Canada Corp. shrunk its quarterly loss to $1.3 million from $28.5 million a year prior, as digital revenue growth and cost cutting tempered continued declines in newspaper advertising and circulation revenue.
Canada’s largest newspaper company, which owns more than 160 brands including the Financial Post, reported Wednesday that its operating expenses for the three months ending Feb. 28 dropped by $36.2 million (21 per cent) due to cost reduction initiatives and a $17-million tax credit from the Ontario government.
Overall revenue, however, fell 10.8 per cent to $157.6 million from $176.7 million a year prior. The drop was attributed to declining print advertising and circulation revenue, which respectively fell 18.8 per cent to $70 million and 7.9 per cent to $53.6 million.
Digital revenue grew by 10.1 per cent to $26.4 million. The company said this marked the fifth consecutive quarter of double-digit growth in digital advertising revenue.
“We are executing on a strategy that continues to deliver results including continued positive signs from our digital advertising initiatives,” chief executive Paul Godfrey said in a statement.
“In addition there has been a slowing of our legacy revenue declines along with continued rigor around cost reduction initiative.”
During the quarter, the company said it implemented initiatives that will cut net costs by $5 million annually.
In late November, Postmedia and Torstar Corp. traded 41 papers and subsequently closed 36 of them. The deal is responsible for $5 million in annual cost savings for both companies, which are coping with structural declines in print advertising. The Competition Bureau is investigating the transaction.