TORONTO - CHUM Ltd. reported its third quarter results yesterday, saying improved results are "reflected by an increase of $28.4 million (to $417.7 million) in shareholders' equity at May 31, 2004 from $389.2 million at August 31, 2003."
Net earnings for the first nine months of fiscal 2004 amounted to $29.1 million, compared with $23.4 million for the corresponding period last year. Net earnings for the nine months ended May 31, 2004 increased by 24.2% over net earnings reported for the corresponding period last year, whereas net earnings per share for the nine months in fiscal 2004 have increased by 5% when compared with the nine months ended May 31, 2003.
Net earnings from operations for the three months ended May 31, 2004 were $14.3 million compared with earnings of $9.9 million, during Q3 2003.
For the nine months ended May 31, 2004, revenues increased to $430 million from $412.9 million at May 31, 2003, an increase of 4.2% when compared with the same period last year. Revenue was $148.8 million for the quarter ended May 31, 2004 compared with $142.9 million for the three months ended May 31, 2003, representing an increase of or 4.1%.
The radio and television segments both contributed to the increased sales as shown in the Business Segment Information schedule below. EBITDA increased to $73.3 million compared with $68.6 million for the comparable nine month period last year. Cash flow from operating activities before change in non-cash balances related to operations increased in the first nine months of fiscal 2004 to $48.8 million from $43.7 million for the comparable period last year.
CHUM's radio sales increased 2.9% over the corresponding period last year and 6.9% for the three months ended May 31, 2004, a marked improvement in the third quarter over the first half of fiscal 2004. In comparison and as reported in Trans-Canada Radio Advertising by Market ("TRAM") Report, released by the Radio Marketing Bureau, radio sales for major and some medium markets across Canada increased over the nine-month period ended May 31, 2004 by 5.9%. Excluding higher industry averages in the Alberta market (where the Company has no radio stations), the national average increase in radio sales appears to be approximately 5.3% over the corresponding period. As reported in its first two interim reports for fiscal 2004, the company's expectations continue to be for a modest increase year over year given CHUM Radio's very strong first half last year which outperformed average radio sales for major and some medium markets by a considerable margin, says the CHUM press release.
The Company's radio stations showed sales growth for the period ended May 31, 2004 at 4.3% for AM radio and at 2.6% for FM radio when compared with the corresponding period last year.
Sales for television, including both advertising and subscription revenue, for the nine months ended May 31, 2004 increased 4.9% when compared with the corresponding period last year. During the third quarter, CHUM conventional television advertising sales (national and local) were down 2.8% when compared with sales in the third quarter of fiscal 2003 and down for the year to May 31, 2004 by 1%. For the nine months ended May 31, 2004 industry national spot sales were down by 1% when compared with the corresponding period last year according to the Television Bureau, Time Sales Survey.
A significant factor determining audience ratings and advertiser revenue during the third quarter of fiscal 2004 were the NHL playoffs. The high interest in the Calgary Flames gave the CBC Network and its national spot sales a dramatic boost. Local conventional sales, which represent the smaller percentage of CHUM's total conventional sales, demonstrated modest growth over last year's comparable quarter.
The company's specialty channels had an increase in sales for the nine months ended May 31, 2004 of 12.8% when compared with the corresponding period last year. For the third quarter of fiscal 2004 compared with the third quarter of fiscal 2003, its specialty television sales were up 10.9%. For the three months ended May 31, 2004, total CHUM Television sales are up 3.6% compared to the same period in fiscal 2003.
CHUM's operations expenses for the nine months ended May 31, 2004 amounted to $356.7 million, an increase of $12.5 million or 3.6% when compared with the nine months ended May 31, 2003. For the three-month period ended May 31, 2004, operations expenses were $800,000 or 0.7% greater than for the corresponding period last year.
The radio segment operations expenses were reduced by $1.8 million or 2.7% for the nine months ended May 31, 2004 when compared with the corresponding period last year. For the third quarter in fiscal 2004, operations expenses were up by $0.6 million or 2.9% over the third quarter of fiscal 2003.
CHUM "continues to develop and leverage the CHUM brand by seeking new opportunities, focusing on the acquisition of quality assets and by expanding the company's listenership and viewership audiences. Although these initiatives may carry short-term risk, the company believes these strategies will help it to achieve its long-term objectives of value, security and growth," reads the release.
Radio's spring ratings released in late May 2004 were strong for most CHUM radio stations, especially in the key markets of Toronto and Vancouver. The exceptions were CHUM stations in Ottawa and Kingston. The level of radio competition appears to be increasing and, in order to remain competitive, the company continues to develop strategies to meet the needs of its customers (both advertisers and listeners), said the company.
Sales expectations for television in fiscal 2005 appear to be similar to, possibly a little stronger than the sales CHUM has experienced in the first nine months of fiscal 2004. Orders for television advertising for the first quarter of fiscal 2005 are proceeding as expected, allowing the it to manage its inventory efficiently.
CHUM's digital specialty television services (such as Drive-In Classics and Court TV Canada) continue to grow in subscriber and advertising revenue in accordance with the company's internal projections. Management expects that at least four of the company's eight digital specialty channels will have positive EBITDA this year.
CHUM also made mention of its pending acquisition of Craig Media, saying it is awaiting CRTC approval, with a hearing date of September 7th.
For more, go to www.chumlimited.com.
Back to headlines