WINNIPEG (CP) _ Media giant CanWest Global Communications Corp. (TSX:CGS.A) has swung to a fourth-quarter profit of $155 million, reversing a year-ago loss of $106 million, after major cost-cutting.
The results came out Thursday after CanWest MediaWorks Income Fund (TSX:CWM.UN) reported that the CanWest limited partnership that is Canada’s largest publisher of newspapers, also reported a profitable fourth-quarter, with earnings of $46.5 million, up from a year-earlier loss of $4.9 million.
CanWest MediaWorks Limited Partnership is 74.2 per cent owned by CanWest Global, while the fund holds a 25.8 per cent stake. For CanWest Global, the profits amounted to a gain of 87 cents a share on sales of $655 million during the three months ended Aug. 31, compared with a loss of 60 cents per share on sales of $694 million a year ago.
For the year, net earnings were $179 million or $1.01 per share, up sharply from $10 million or six cents per share in 2005. The full-year results included a $164-million gain on the sale of TV3 Ireland in the fourth quarter. Consolidated revenues were $2.9 billion for the year, down five per cent from $3 billion the year before.
"All our major operations faced difficult advertising markets over the past year with adverse currency translation contributing further to declines in results from the South Pacific," stated CanWest Global CEO Leonard Asper.
"Markets now appear to be stabilizing and we expect a firming of revenues and EBITDA (pre-tax earnings) in the new fiscal year."
CanWest MediaWorks, for its part, had revenue of $274.4 million for the quarter ended Aug. 31, a one per cent increase over the same quarter last year. The fund attributed the increase in net earnings to reduced interest expense and income tax expense after the change in corporate structure to a limited partnership in October 2005.
"From an EBITDA perspective, we achieved growth in excess of 30 per cent in Q4, largely as a result of the restructuring of Dose in Q3, and cost-reduction efforts implemented during the year," partnership CEO Peter Viner said during a conference call with analysts.
"Cost containment will continue to be a major focus in fiscal 2007."
For the financial year, net earnings totalled $160.7 million, up from $25.7 million in the previous year, while annual revenue rose three per cent to $1.17 billion.
MediaWorks owns 10 major daily newspapers: Vancouver Sun, Vancouver Province, Ottawa Citizen, Montreal Gazette, Edmonton Journal, Calgary Herald, Windsor Star, Victoria Times-Colonist, Regina Leader Post and Saskatoon Star Phoenix. Other holdings include a one-third interest in Metro Ottawa and Metro Vancouver, free commuter dailies, together with 23 smaller community daily, weekly and bi-weekly publications.
CanWest Global is an international media company, whose other holdings include the Global Television Network, as well as stakes in conventional television, specialty cable channels, web sites and radio stations and networks in Canada, New Zealand, Australia, Turkey, Singapore, Indonesia, Malaysia, the United Kingdom and the United States.
On the TSX Thursday, CanWest MediaWorks units were trading down 23 cents, or 3.3 per cent, at $6.73, while CanWest Global stock was unchanged at $10.27.