Advertisements
Half of CHUM Ltd.'s digital television channels will show an operating profit by the end of this year, the company said yesterday as it reported stronger second-quarter financial results.
Four of the firm's eight specialty channels will likely report positive EBITDA (earnings before interest, taxes, depreciation and amortization) for the full fiscal year, and the others "are certainly burning through less [money] than we had thought," CHUM chief executive officer Jay Switzer told analysts on a conference call yesterday.
At the beginning of this fiscal year last fall CHUM had projected only one or two digital channels would show an operating profit, and overall losses for the group would be in the $2-million range. Now, there will be just a "very small loss" over all, Mr. Switzer said.
The main reason for the rosier outlook is higher subscription revenue, he said.
While the digital channels are not yet a big portion of the company's business, "they will be important," Mr. Switzer said, "and we're in very good shape."
The outlook for conventional television is not quite as rosy, he said, with automotive and government advertising down. Ad markets appear to be improving somewhat for the last half of this fiscal year, but "it will not be gangbusters," he said.
The recent deal to buy Craig Media Inc., giving CHUM a broader television presence with new stations in Manitoba and Alberta, will help sell advertising to national advertisers, Mr. Switzer said. However, he said the company does not expect to compete on the same level as the CTV or Global networks, either for advertisers or for the purchase of programming.
"We're [now] in their sandbox," he said. "[but] we're just staying away in the far corner of the sandbox."
Mr. Switzer said Craig's Toronto 1 television station will be put into a trusteeship after the overall Craig transactions get regulatory approval, and then it will be divested as quickly as possible.
CHUM reported a profit of $1.2-million in the second quarter ended Feb. 29, an improvement from the loss of $50,000 in the same quarter last year.
Share profit was 4 cents, compared with a loss of less than 1 cent last year.
The firm's television operations -- including both conventional stations and specialty channels -- showed the greatest revenue gains in the quarter, growing 5.5 per cent to $96.7-million compared with the year-earlier period.
Radio revenue grew at a slower pace, 1.3 per cent to $26.6-million, although the company noted that last year's second quarter was particularly strong.
The company's overall EBITDA fell by 4.9 per cent year-over-year to $9.9-million in the second quarter.
CHUM took a one-time $2.1-million charge in the second quarter, but would say only that it was related to "personnel changes."
For the first half of the current fiscal year, CHUM's profit rose to $14.8-million from $13.5-million in the same period a year earlier. Share profit fell to 54 cents from 58 cents, because of dilution resulting from issuing new shares.