Profits fall at Corus
Toronto, - Corus Entertainment reported sharp declines in revenue and net profit for the last quarter but added that its TV and radio divisions are showing strong growth.
Consolidated revenue for the second quarter was $147.5 million compared to $167.7 million. Last year's results included Viewers' Choice and Klutz which were disposed of in fiscal 2002. Net income for the quarter was $7.0 million or $0.16 per share, compared to $19.3 million or $0.45 per share last year.
Last year's second quarter net income included an after tax gain of $14.3 million on the disposition of the Company's interest in The Comedy Network. Comparable earnings per share for the quarter were $0.16 compared to $0.12 last year. Cash flow derived from operations per share for the quarter is $1.19 compared with $1.34 last year.
EBITDA for the quarter was $31.4 million compared to $31.6 million last year. However, on a pro forma basis, reflecting last year's asset dispositions, EBITDA was up 12% from $28.0 million and consolidated operating margin improved from 19% to 21%.
"We were very encouraged by double digit advertising growth for both our television and radio assets in the quarter," said John Cassaday, President and CEO of Corus Entertainment. "The continued strong performance of television and radio has allowed us to reposition Nelvana without shrinking our consolidated operating earnings."
Corus Radio revenues increased to $48.9 million, up 12% from $43.5 million last year on an actual and pro forma basis. EBITDA was $7.1 million, up 32% from $5.4 million last year. Radio margins were 15% for the quarter, up from 12% last year.
Nelvana's results for the quarter were in line with plan and expectations. Branded Consumer Products revenue and EBITDA saw significant growth in the quarter with revenues up 82% on a pro forma basis over last year to $10.5 million from $5.8 million, largely due to the growth of the Beyblade property in particular. EBITDA nearly tripled, from $1.0 million pro forma last year to $2.6 million. Production and Distribution saw a decline in revenue for the quarter of 28% over last year, reflecting the loss of revenue from the German market due to the bankruptcy of RTV in Q3 last year.
Overall, the content division revenues in the quarter declined by 7% on a pro forma basis to $28.9 million with EBITDA of $2.6 million vs. $4.7 million pro forma a year ago.
Television contributed quarterly revenue of $71.6 million, roughly equal to pro forma Q2 revenue of the previous year, but a decline of 9% from actual revenue of $78.9 million last year as a result of the disposition of Viewers' Choice and other assets. EBITDA grew to $22.8 million, up 2% from $22.3 million last year. On a pro forma basis, EBITDA increased by 18%. Television's margins were 32% for the quarter, up from 28% last year. Advertising revenue for television continued to climb, up 10% for the quarter and 8% year-to-date on a pro forma basis.
Consolidated year-to-date revenues were $313.5 million, down from $347.9 million last year, reflecting asset dispositions. On a pro forma basis, revenue in the prior year was $316.1 million. Net income year-to-date is $15.3 million compared to $23.1 million last year. EBITDA for the six months is $79.4 million, compared to $80.2 million last year. However, on a pro forma basis, EBITDA is up 5% from $75.8 million last year. Cash flow derived from operations per share for the six month period is $2.17 compared with $2.66 last year.
In the Radio division, YTD revenues are $108.2 million, up 9% from last year. EBITDA is $23.2 million, up 14% from $20.4 million last year. YTD margins are 21%. In the Content Division, YTD revenues are $51.6 million compared to $95.6 million last year, reflecting the disposition of Klutz and the decision to produce fewer episodes. EBITDA is $2.6 million compared to $12.5 million last year and $10.0 million on a pro forma basis. Television YTD revenue is $156.7 million compared to $154.9 million last year and $153.9 million on a pro forma basis. EBITDA is $56.9 million compared to $49.8 million last year and $47.9 million on a pro forma basis. Television YTD margins are 36% compared to 32% a year ago.
"The company has worked hard to improve our industry leading margins in both Television and Radio, reflecting our efforts on cost control and customer service," added Heather Shaw, Executive Chair of Corus Entertainment. "We are also pleased with the progress of our strategy at Nelvana."
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