Postmedia Network Canada Corp. reported a loss of $11.8-million in the first quarter, as restructuring costs mounted and advertising revenue fell.
Revenue fell by more than 8 per cent to $194-million as print ad sales dropped by 12 per cent to $16-million. Digital revenue decreased by 5 per cent, as a decline in online ad sales was partly offset by new subscriptions.
The publisher of big-city newspapers made a profit of $6.7-million in the year-earlier quarter.
“We continue to face significant revenue challenges as a result of a rapidly changing advertising market,” said Paul Godfrey, chief executive officer of Postmedia, whose titles include National Post, Ottawa Citizen, Montreal Gazette and Calgary Herald.
Like most publishing companies, Postmedia is trying to boost digital revenue amid dwindling sales of traditional print ads. It has sold real estate, erected digital paywalls and killed Sunday newspaper editions in some cities while slashing jobs. Postmedia is part way into a three-year restructuring designed to cut the operating budget by $120-million. The company said on Thursday that its measures have achieved annualized savings of $87-million.
As part of the restructuring, Postmedia outsourced production of the Calgary Herald in November and said Vancouver’s Sun and province would soon be put together by outsiders.
“As the newspaper industry continues to transform, we are confident that we are positioning the company for future success,” Mr. Godfrey said in a news release.
Once part of the Asper media empire, Postmedia is a publicly traded company whose biggest shareholders are two U.S. hedge funds, Golden Tree Asset Management and Silver Point Capital.