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November 6 – November 13, 2008 Edition
Up in Third Quarter
TORONTO, ONTARIO (Authorlink News/11/6/08)–Torstar Corporation, parent company for the global womens publisher Harlequin Enterprises, last week reported financial results for the third quarter and nine months ended September 30, 2008.
Book Publishing operating profit was $50.3 million in 2008, up $2.4 million from $47.9 million in 2007. Corporate costs were $13.1 million year to date in 2008 down $1.0 million from $14.1 million in 2007 from a combination of lower professional fees and executive compensation costs.
In the face of challenging economic conditions and trends, the third quarter operating results were down modestly, said Robert Prichard, Torstars President and Chief Executive Officer. Harlequin had a solid quarter and remains on course for a good year of growth. We also enjoyed strong revenue growth in our digital businesses which are performing well. Our principal challenges were in the daily and community newspapers where lower advertising revenues reduced profitability and employment advertising was particularly affected by the slowing Ontario economy. The newspapers also faced rising newsprint costs during the quarter.
Torstars Book Publishing revenue for the year was $346.7 million, down $9.4 million from last year as a $13.0 million decline from the unfavorable impact of foreign exchange rates more than offset underlying growth of $3.6 million.
Operating profit, before restructuring and other charges, was $31.7 million in the third quarter, down $1.8 million from $33.5 million in 2007. Including the $19.4 million of restructuring and other charges, operating profit was $12.3 million in the third quarter of 2008.
Harlequin has had good results through the first nine months of 2008 with strong performance in North America Retail and digital manga sales in Japan. The fourth quarter should be in line with prior year resulting in good growth for the full year, Prichard said.
We remain concerned that the U.S. economy could have a negative impact on Harlequins results, but to date there is no evidence of this. If the Canadian dollar remains at its current levels relative to the US dollar and overseas currencies, we are anticipating a positive foreign exchange impact in the fourth quarter of approximately $2.0 million.
The outlook remains challenging. The soft economy, higher newsprint costs and rising pension costs will negatively affect profitability (of Torstar). As a result we will remain very focused on strong cost management and will benefit in the fourth quarter and 2009 from restructuring efforts already undertaken. At the same time, we will aggressively grow our digital businesses, exploit growth opportunities in our community newspaper business and continue to build on Harlequins success.
Company-wide, Torstar Corporation reported revenue of $372.1 million, up $2.9 million or 0.8% from $369.2 million last year, including $1.2 million from the positive impact of foreign exchange.
Excluding a restructuring charge and write-down noted above, net income was $15.6 million ($0.20 per share) up $7.2 million ($0.09 per share) from $8.4 million ($0.11 per share) in 2007. Torstar reported a net loss of $2.7 million ($0.03 per share).
About Torstar Corporation
Torstar Corporation is a broadly based media company listed on the Toronto Stock Exchange (TS.B). Its businesses include the Star Media Group led by the Toronto Star, Canadas largest daily newspaper and digital properties including thestar.com, toronto.com, Wheels.ca, Workopolis, Olive Canada Network, and eyeReturn; Metroland Media Group, publishers of community and daily newspapers in Ontario; and Harlequin Enterprises, a leading global publisher of books for women.
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