Sale of Harlequin boosts Torstar net income
The increase in income comes as the company announced plans to develop a new tablet edition for the Toronto Star.
By: Madhavi Acharya-Tom Yew Business Reporter, Published on Wed Nov 05 2014
The sale of Harlequin helped boost earnings at Torstar Corp., publisher of the Toronto Star, in the third quarter, the company said. The increase in income, which also includes non-cash impairment charges of $97.3 million, comes as the company announced plans to develop a new tablet edition for the Toronto Star.
Net income attributable to equity shareholders was $125.3 million, or $1.57 per share, for the three months ended Sept. 30, 2014.
That’s up from a loss of $70.8 million or 89 cents per share, in the year-earlier quarter.
That figure includes gains from the $455 million sale of the book publisher, announced in May, as well as charges that reduce the book value of certain Torstar property, plant, equipment, goodwill, and investments in joint ventures, the company said.
Segmented adjusted earnings before interest, taxes, depreciation and amortization, commonly known as EBITDA, was $16 million in the third quarter, down $4.7 million, or 22.7 per cent from $20.7 million in third quarter of 2013.
Total segmented revenue was $211.2 million for the quarter. That’s down $16.2 million, or 7.1 per cent, from $227.4 million in the year-earlier period.
“While revenues were affected by continued shifts in spending by advertisers, pressure on revenues eased somewhat in the quarter at Metroland Media, our community media operation. We were also encouraged by the revenue growth in our digital offerings in the quarter,” David Holland, president and chief executive officer of Torstar, said in a release.
“Looking forward for the balance of the year, we expect continued challenges in print advertising revenues combined with relative stability in multi-platform subscriber revenues and flyer distribution revenues.”
In addition to the Star, Torstar’s holdings include thestar.com, Metroland community newspapers, Workopolis, Olive Media and group-buying website Wagjag.com.
The Toronto Star and La Presse, a Montreal-based French-language daily, have reached an agreement in principle to share a common tablet technology and offer joint marketing opportunities to national advertisers, Torstar said in a separate announcement.
“This is another important step forward for our industry,” John Cruickshank, publisher of The Toronto Star and president of Star Media Group said. “The new tablet edition will be a key element of our multi-platform evolution.”
The Star’s digital tablet edition, which will be based on the La Presse+ news platform technology, “will present news and information in an intuitive and interactive environment that blends the best of print, web, mobile and video,” The Toronto Star said.
It is expected to be launched in the fall of 2015, Torstar said.
The project is expected to require additional capital spending of $1 million to $2 million in the fourth quarter of 2014 and an additional $10 million to $12 million in 2015, the company said.
It also anticipates eliminating the paywall on its www.thestar.com website next year.
As a result of the sale of Harlequin, Torstar has retired all outstanding debt, the company said. It ended the third quarter with total cash of $277.3 million.