Canadian newspaper giant Postmedia suffered $15.5-million net loss in its third quarter, which ended May 31.
The chain said on Wednesday that the loss, which included a $9.4 million non-cash impairment charge, compared to net earnings of $13 million in the same period in 2017.
“The change was primarily the result of an increase in impairment expense, a decrease in operating income before depreciation, amortization, impairment and restructuring as compared to the same period in the prior year and a recovery of restructuring expense of $22.8 million related to changes in the company’s employee benefit plans in the prior year,” said Postmedia in a news release.
The company said revenue for the quarter was $171 million compared to $190 million last year, a decrease of 10 per cent. The revenue decline was primarily due to decreases in print advertising revenue of $14.8 million or 15.8 per cent and print circulation revenue of $4.5 million or 7.6 per cent. However, it said digital revenue increased by $2 million or 7.2 per cent in the quarter with digital advertising revenue up 10 per cent – the sixth consecutive quarter of double-digit revenue growth in this area.
“We are encouraged to see our sixth straight quarter of double-digit revenue increases from our digital advertising initiatives yet we continue to see a rate of legacy revenue declination that outpaces our digital revenue growth,” said Paul Godfrey, executive chairman and chief executive officer, in a statement. “That reality means that we must continue to take the necessary steps to focus on areas where we can win and make the tough, yet decisive, decisions about where we need to make changes.”
Postmedia said it has continued to implement cost savings initiatives aimed at reducing operating costs including outsourcing production, office space rationalization and changes to printing schedules. During the quarter, it said it implemented initiatives which are expected to result in about $7 million of net annualized cost savings.
“In June 2018 the company began implementation of a cost saving initiative aimed at further reducing compensation expenses by approximately 10 per cent by the end of the fiscal year through a combination of voluntary and involuntary headcount reductions,” it added.
“The company will continue to identify and undertake ongoing cost reduction initiatives in an effort to address revenue declination in the legacy print business.”
Postmedia owns, among other properties, the Calgary Herald, the Edmonton Journal, the Edmonton Sun and the Calgary Sun.
Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.