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Corus pleased with double-digit ad revenue growth

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Corus Entertainment Inc.
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TORONTO - "Advertising demand for radio and television was strong in the quarter. Our third quarter advertising revenue results were excellent with the exception of two radio markets which were impacted by competitive factors. Despite these competitive pressures, we are on track to achieve our segment profit growth targets in our core radio and television businesses," said John Cassaday, president and CEO of Corus Entertainment, earlier this week.

The statement was part of the company's press release touting its third quarter results, ended May 31, 2004.

"Continued implications of structural change in the production and distribution business worldwide have necessitated a film library write-down in our content division," added Cassaday. "However, Nelvana continues to produce positive cash flow from operations as we build the library and is executing well on its strategic priorities. We are on track to achieve our year-end consolidated cash flow target of 25% growth over the prior year."

Consolidated revenue for the third quarter was $163.9 million, up 6% from the prior year's Q3. Net loss for the quarter was $51.2 million, down from earnings of $12.3 million last year.

Adjusted net income and adjusted basic EPS for the quarter, "which excludes various items not indicative of the company's core operating results," says the release, were $9.1 million, compared to $15.2 million last year.

Corus Television (which includes brands such as CMT, W, and YTV, as well as a few eastern Ontario broadcasters) had quarterly revenue growth of 13% over the prior year, to $84.7 million. Both advertising and subscriber revenue contributed to the growth with gains of 22% and 4% respectively over prior year. Movie Central, Corus' western-based pay television service, continued its consistent quarter-over-quarter subscriber growth, finishing the third quarter with 702,000 subscribers, up 6% since August 31, 2004. Segment profit for television was up 10% in the third quarter at $30.1 million. Segment profit margin for the quarter was 35% compared to 36% last year.

Corus Radio revenues in the quarter increased to $61 million, up from $60.1 million last year. Strong advertising gains in Ontario and Quebec were offset by competitive challenges in two specific western Canada markets, which the press release did not name (Calgary and Vancouver). Segment profit and segment profit margin for the third quarter remained flat at $18.3 million and 30% respectively.

"Corrective action has been taken in the two markets that are currently presenting revenue challenges," says the release.

"Despite the revenue declines, our profitability remains strong in both markets due to cluster strength. Recent positive BBM results suggest continued positive momentum for all other Corus radio properties," added Cassaday.

For the full release, go to www.corusent.com.
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