Losses deepened at Postmedia Network Canada Corp. in the last quarter, as national and classified advertising in its newspapers continued to decline.
The publisher –which owns such big-city metros such as the Ottawa Citizen, Montreal Gazette and Calgary Herald in addition to the National Post – said it lost $14.2-million in its second quarter, compared with $11.1-million a year ago.
Like other publishers, the company has been struggling as the advertising market undergoes massive shifts that has seen money flow out of papers and toward digital alternatives.
One of the biggest problems for newspaper companies is that they are losing money from their printed editions faster than they can make money online. Print advertising revenue dropped by almost 14 per cent in the quarter or $16.9-million, while digital advertising increased by 1.7 per cent or $400,000.
Postmedia also saw circulation revenue fall by 6.5 per cent or $3.3-million as fewer readers subscribed to its papers.
The company has embarked on an aggressive cost cutting plan, and said it has managed to take almost $60-million out of its operating budget by cutting jobs, shifting production to a centralized facility, and suspending Sunday publishing in some markets. That takes the company about halfway to chief executive officer Paul Godfrey's goal of cutting $120-million over the next two years, as he tries to cut so-called legacy costs out of the business.
"As has been noted by several of our industry peers, the outlook remains unpredictable with respect to traditional revenue streams," Mr. Godfrey stated. "We are pleased, however, with the substance of our transformation program which to date has exceeded expectations not only on the cost savings front but also the overall workings of our organization. We expect to continue that transformation and accelerate our initiatives in new areas of revenue generation including paid content."