WINNIPEG - Led by strong results across the board, but especially in its New Zealand and Australian holdings, CanWest Global Communications Corp. reported today that consolidated net earnings for the year ended were $46 million.
That compares to $13 million for the prior year. "The growth in net earnings reflects improvement in earnings before interest, taxes, depreciation and amortization (EBITDA) at all major broadcasting and publishing operations in Canada and overseas, with substantial gains at Network TEN and the company's television and radio operations in New Zealand," reads today's press release.
Plus, results in the current year include a number of non-recurring items including restructuring provisions and write downs of certain of the company's film and television libraries, and recovery of future income taxes at Network TEN. Excluding these non-recurring charges, net earnings for the year would have been $62 million.
On a combined basis, which includes the company's 57.1% proportional share of Network TEN's financial results, EBITDA before non-recurring provisions for restructuring and write downs of certain film and television program libraries was $571 million. This represents an increase of 12% from the $510 million combined pro forma result for the prior year. After including non-recurring charges, combined EBITDA in fiscal 2003 was $518 million, a 1% improvement over last year's pro forma combined result.
Combined revenues for 2003 increased by 8% to $2.65 billion compared to fiscal 2002 and were slightly above actual combined revenues of $2.59 billion reported for the prior year.
Pro forma results for fiscal 2002 provide a comparison based upon the same asset base as existed during the year ended August 31, 2003. Pro forma results for 2002, therefore, exclude the revenue and EBITDA contributions of certain newspapers and related assets in Saskatchewan and the Atlantic provinces that were sold in August 2002, and also exclude the contributions from February 16 to August 31, 2002 of those small market newspaper and related assets in Ontario that were sold on February 15, 2003.
Revenues for fiscal 2003 for the company's newspaper and online operations, including the National Post, were $1.17 billion, 4% higher than pro forma revenues of $1.13 billion for the same newspaper assets in fiscal 2002. Newspaper and online EBITDA for the year increased by 7% to $258 million, compared to a pro forma result of $242 million for the previous year. The EBITDA improvement was primarily attributable to increased revenues and cost reduction initiatives at all major newspapers.
Revenues from CanWest's Canadian broadcasting operations for fiscal 2003 increased by 5% to $728 million from $692 million in fiscal 2002. EBITDA for the year was $220 million, 15% higher than the $191 million recorded in the prior year. A combination of increased revenues and cost containment accounted for the improved results.
Network TEN's contribution to CanWest's combined EBITDA increased by 31% to $107 million for the year. A 39% increase in revenues at New Zealand television resulted in EBITDA of $10 million in fiscal 2003 compared to an EBITDA loss of $2 million in fiscal 2002. New Zealand radio recorded EBITDA growth of 27% to $21 million compared to last year, while TV3 Ireland also maintained its consistent positive growth trend, with CanWest's share of its EBITDA increasing to $10 million for the year, up from $8 million last year.
Revenues for the year at CanWest Entertainment, the company's program production and distribution division, increased to $191 million from $157 million last year. However, Entertainment recorded an EBITDA loss of $35 million as a result of the persistent weakness in international markets. Entertainment also recorded a $23 million write down in the carrying value of its film and television program library. Earlier this year, the company initiated a significant change in business strategy at CanWest Entertainment, refocusing its development and production activities primarily to support the programming needs of the company's Canadian television operations.
As for just the fourth quarter, a traditionally weaker one for media companies, revenue increased by 16% to $619 million over pro forma Q4 2002. Combined EBITDA before non-recurring charges of $32 million recorded during the quarter, was $69 million for the fourth quarter, 12% higher than the fourth quarter of fiscal 2002 on a pro forma basis.
The company reported a net loss of $45 million in the fourth quarter compared to a net loss of $104 million for the same period last year. With the exception of CanWest Entertainment, the quarter's results "reflect significantly higher revenues and EBITDA at all CanWest media operations," says the press release.
Fourth quarter revenues from Canadian television operations grew by 6% to $135 million compared to Q4 2002. EBITDA increased by 66% to $13 million, with the gains attributable to a combination of improved advertising markets, elimination of EBITDA losses at the company's start-up digital specialty channels, and effective control over costs.
"We have made tremendous strides in reducing both operating costs and debt servicing costs," said CanWest CEO Leonard Asper. "We will continue to explore opportunities to divest or monetize assets that are not central to our future corporate strategy, and also explore other opportunities to improve the CanWest balance sheet.
"Ad markets for newspapers are showing renewed strength at the close of fiscal 2003, and we see this positive momentum continuing into fiscal 2004. The outstanding results of our international broadcasting operations in Australia, and New Zealand have carried over into the new fiscal year, and should propel us to a strong 2004," he continued.
"he TV advertising market in Canada was, however, less buoyant as we moved into the new fiscal year. The company anticipates that its substantial line-up of new shows on Global will score with audiences, and help to maintain Global's traditional ratings leadership in its chosen demographic. The Company's diverse sources of revenues and profits protect it from weaknesses in one particular segment so we expect the strength in the South Pacific, and Canadian newspapers, to provide the basis for a strong 2004."
The company also used the announcement to thank all of those who expressed their condolences on the death of company founder Israel (Izzy) Asper, who died October 7th at the age of 71.
"Mr. Asper will be greatly missed by his family, and by all those who had the good fortune to know him. The Asper family and all those in the company who had the privilege of working in close proximity to 'Izzy' Asper were deeply touched and gratified by the many kind tributes and condolences expressed by his countless friends, colleagues, competitors and admirers," says the release.
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