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Corus exceeds targets

TORONTO - Corus Entertainment Inc. announced strong gains in net income and EBITDA for the fourth quarter and full year yesterday.

The television and radio divisions exceeded targets while the content division performed up to expectations, recovering strongly from last year's loss with a solid profit and positive cash flow while transitioning to a new management team and a new strategy. Corus owns TV assets such as YTV, CMT and Movie Central, 50 radio stations and the Nelvana animation house.

"This has been an excellent year for Corus," said John Cassaday, president and CEO. "We delivered top line growth, despite the negative impact in Canada of a number of unforeseen events, including war uncertainties and SARS. Our exceptional performance in growing earnings and delivering cash flow of $35 million for the year reflects our efforts to integrate our assets and focus the entire organization on operational improvement."

Consolidated revenues for the fourth quarter ending August 31, 2003 was $175.1 million, up 2% over the same period a year ago. Increased revenues in the television and radio divisions were offset by lower production and distribution revenues in the content division as the result of a planned decrease in production.

Net income for the quarter was $12.4 million, up from a loss of $189.9 million in Q4 2002.

EBITDA for the quarter grew significantly to $41.7 million, compared to $4.4 million last year. Television and radio achieved EBITDA growth of 24% and 9% respectively and content reduced its EBITDA loss to $900,000 in 2003 from $32.3 million last year. The company's EBITDA margin for the fourth quarter improved to 24% from 3% last year.

"We saw good revenue growth in the fourth quarter from the radio division and from both our youth and adult targeted television networks, pointing to positive momentum in the ad market for fiscal 2004," says Cassaday.

Corus radio revenues increased to $57.7 million for the quarter, up 4% from last year driven by a 7% increase in national advertising sales for the quarter. EBITDA was $16.6 million, up 9%. Radio EBITDA margins for the quarter grew to 29% from 28% last year.

Television revenues for the quarter were $75.2 million, up 2% from $73.7 million last year, reflecting strong growth in advertising revenues, up 6% for the quarter. EBITDA for the fourth quarter grew by 24% to $29.3 million. EBITDA margin for the quarter improved to 39% from 32% last year.

Total fiscal 2003 consolidated revenues were $643.9 million, down 5% due to several business divestitures in 2002 and 2003 and the planned reduction in Nelvana's production slate. On a pro forma basis, revenues were up 2% over the previous year reflecting the advertising growth from Corus' core radio and television assets.

Net income for the year was $40 million, compared to a loss of $168.6 million in 2002.

Consolidated EBITDA was strong for the year, up 32% to $165.3 million. On a pro forma basis, EBITDA was up 38% from $119.7 million last year. EBITDA margin ended the year at 26% compared to 19% last year.

Year-end results for the radio division showed strong gains in national and local sales for the year, driving an increase in overall radio revenues of 7% to $226 million in fiscal 2003 over '02. EBITDA for the year grew 10% to $58.1 million. Corus Radio ended the year with a 26% EBITDA margin, up from 25% a year ago.

The television division enjoyed impressive audience growth in fiscal 2003, posting a 40% increase in adult viewers age 25 to 54 across the specialty analog services, YTV, W Network and CMT.

Overall, television revenues for the year were down 1% over prior year at $306.9 million, mainly due to the loss in revenue from the disposition of Viewers' Choice in fiscal 2002. On a pro forma basis, overall television revenues were up 2% reflecting advertising revenue growth of 5%, led by W Network's strong performance.

Despite premium subscriber declines in spring/summer 2002 due to pricing activities by broadcast distribution undertakings, Movie Central, Corus' western-based pay television service, finished the year with 658,000 subscribers, up 8% from the prior year. Television EBITDA grew 14% in the year to $113.4 million. On a pro forma basis, EBITDA increased by 18%. EBITDA margin was 37% compared to 32% on a pro forma basis, reflecting the division's ability to maximize synergies and cost efficiencies across its services.

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