Chum reports solid results, says programming costs going up with new competition
TORONTO - All indicators rose at CHUM Limited in the third quarter of 2003, and industry analysts are beginning to see more from the company as it continues along towards its goal of being as open as most other publicly-traded companies.
In the past, Chum's quarterly reports were pretty spare compared to other public media companies, and it mostly reserved public comments to shareholders, analysts and the media for its annual general meeting. With CEO Jay Switzer at the helm, that's changing.
The company even held its first-ever quarterly conference call with analysts yesterday.
In its release and during that call Chum announced net earnings for the first nine months of fiscal 2003, ended May 31st, came to $23.4 million, a 28.5% increase over the first three quarters of 2002. Net earnings from operations in Q3 2003 were $9.9 million, a 33.7% increase over 2002's third quarter.
Revenue over the first three quarters jumped 12.8% to $412.8 million while in Q3, revenue was up by 9% to $142.9 million.
TV revenue increased 10.1% in the quarter, compared to last year's, to $109.5 million while radio revenue was $30.5 million, a 6.8% increase over last year's Q3. TV EBITDA (earnings before interest, taxes, depreciation and amortization) was $22.6 million in the quarter, a 14.7% increase, while radio EBITDA was $8.9 million, a jump of 29.6%.
Going into the fourth quarter and looking into the next fiscal year, said Switzer, things are still looking up as advertiser interest is higher now than a year ago. "We are seeing earlier than normal bookings," he said during the conference call.
He said the ad market in radio and TV was "hot" in both Ontario and Alberta, but cooler in British Columbia.
While the company is happy with its progress in B.C., Switzer noted, "we are pleased with the momentum in (the Citytv station in) Vancouver, (but) we're not quite as pleased with Victoria (The New VI).
"We have some concerns that the B.C. market overall in '04 may be a little softer than many thought," he added.
In Ontario, with Craig Media-owned Toronto 1 coming to air in September, Switzer says he hasn't yet seen an impact in terms of ad sales, but was clear in saying that the newcomer, along with OMNI.2, the new Rogers Media-owned ethnic broadcaster launched in 2002, has driven programming costs up to 10% higher per show, meaning the company is watching its margins, "and choosing shows very carefully," he said.
On the digital specialty side, Switzer lauded the company's radio-TV deal with Corus that saw Edge TV shuttered while Chum's MuchLoud and Corus' Edge Radio will work together, and said his digitals are losing less cash than the industry norm.
Losses at the company's seven digi-nets (Court TV Canada, BookTelevision, SexTV, FashionTelevisionChannel, MuchLoud, MuchVibe and Drive-In Classics) total less than $4 million this year and Switzer says he expects two will break even next year "We continue to be the low-cost operator in the business," he added.
For the full release, go to www.chumlimited.com.
Chum owns and operates 29 radio stations, eight local television stations and 17 specialty channels, as well as an environmental music distribution division.
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