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Category Investors Date 4/5/2006 |
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CanWest MediaWorks Income Fund Reports Solid Q2 Revenue Growth
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Toronto, Ontario - CanWest MediaWorks Income Fund (the "Fund") today announced financial results for CanWest MediaWorks Limited Partnership (the “Partnership”) for the second quarter and six months ended February 28, 2006.
Revenue for the second quarter was $279 million, an $11.8 million or 4% increase over the same period last year. The revenue increase was attributable to gains in ROP advertising at the metropolitan daily newspapers, the impact of new products, Dose and Metro, and the continued expansion of online advertising. ROP advertising was particularly strong in the national category, which offset some weakness in classifieds. On a combined print and online basis, classifieds showed a slight increase in the quarter. Retail revenue showed modest growth in the quarter. Interactive revenue increased $1.4 million or 22% compared to prior year with strong gains in FPInfomart and general advertising on canada.com. Inserts continued to demonstrate good growth with year-over-year gains in the quarter of 4%. Circulation revenue increased slightly with price increases more than offsetting a slight decline in number of copies sold.
EBITDA¹ for the second quarter was $52.3 million compared to $58.2 million for the same period last year. The EBITDA decline was impacted by severance costs in the quarter related to the implementation of cost containment initiatives and start-up losses associated with Dose and Metro. Severance costs in the quarter totaled $5.8 million compared to $0.5 million in the same period last year. Adjusting for severance costs and Dose and Metro start-up losses, EBITDA for the second quarter was $61.4 million representing an increase of 1% compared to $60.8 million for the same period last year after comparable adjustments including the add-back of the Ravelston Management contract.
Distributable cash for the quarter was $39.0 million or $0.18 per unit. Cash distributions for the quarter totaled $0.25 per unit. As we have noted previously, due to the seasonal nature of newspaper advertising revenue, we expect distributions declared to exceed distributable cash in the second and fourth quarters and the shortfall will be offset by higher distributable cash generated in the first and third quarters. For the period October 13, 2005 to February 28, 2006 distributions declared were 93% of distributable cash. Net earnings in the quarter were $36.7 million compared to $5.0 million in the same quarter last year. The increase in net earnings primarily reflects lower taxes due to the change in corporate structure to a Limited Partnership and lower financing costs.
Commenting on the results, Peter Viner, President and Chief Executive Officer of the Limited Partnership said, “We delivered another strong quarter of revenue gains thanks to the success of our newspapers in Western Canada, where the economy continues to pace well ahead of the rest of the country. During the quarter, we implemented a number of cost containment initiatives, which we believe will position us to deliver year-over-year EBITDA growth in fiscal 2006. We are also pleased with our performance to date in generating distributable cash in excess of unitholder distribution requirements.”
Six Months Ended February 28, 2006
For the six-month period, revenues totaled $593.1 million, representing a $26.4 million or 5% increase over the same period last year. Revenue growth for the first half of the year was largely driven by increases in retail and national ROP advertising, inserts, and strong growth in Interactive revenues. Revenue growth is more heavily weighted, on a same-store basis, to the Western Canadian metropolitan daily newspapers.
EBITDA for the six-months of fiscal 2006 was $134.6 million compared to $145.6 million for the same period last year. EBITDA declines are attributable to severance charges and start-up losses at new publications, Dose and Metro. Distributable cash for the period October 13, 2005 to February 28, 2006 was $86 million or $0.40 per unit. Distributions declared for the period October 13, 2005 to February 28, 2006 totaled $0.37 per unit. For the six months ended February 28, 2006, net earnings were $67.5 million compared to $25.8 million in the same period last year. The increase in net earnings primarily reflects lower taxes due to the change in corporate structure to a Limited Partnership and lower financing costs.
Commenting on the outlook for the rest of the year, Peter Viner, President and Chief Executive Officer, said “Our outlook for the remainder of the year is positive. We expect continued revenue growth in retail and national ROP, inserts, and online classifieds. Print classifieds will continue to be a challenge, but our integrated print and online strategy is helping to mitigate softness in this category. We expect to see the full impact of cost containment initiatives implemented this quarter in the second half of the year and, supported by attractive newsprint pricing arrangements and fixed interest rate costs, the Fund is positioned for growth in distributable cash.”
Basis of Presentation
The Publications Group, formerly owned by CanWest MediaWorks Inc., was acquired by CanWest MediaWorks Limited Partnership (the “Limited Partnership”), in which, effective October 13, 2005, the Fund acquired an approximate 26% interest.
The financial statements released today include the presentation of combined consolidated financial performance of the Publications Group for the period from September 1, 2005 to October 12, 2005, the time pre-dating the formation of the Limited Partnership, and the consolidated financial results of the Limited Partnership for the period from October 13, 2005 to February 28, 2006. The comparative period for the six months ended of fiscal 2005 covers the combined consolidated financial results of the Publications Group.
About CanWest MediaWorks Income Fund and CanWest MediaWorks Limited Partnership
CanWest MediaWorks Income Fund (TSX: CWM.UN; www.cwmincomefund.com) is an unincorporated, open-ended trust that holds an approximate 26% equity interest in CanWest MediaWorks Limited Partnership, which is the largest publisher of newspapers in Canada, as measured by paid circulation, readership and revenue.
The assets within the Limited Partnership comprise ten major metropolitan daily newspapers serving nine Canadian cities; Vancouver Sun, The Province (Vancouver), Ottawa Citizen, The Gazette (Montreal), The Edmonton Journal, Calgary Herald, The Windsor Star, Times-Colonist (Victoria), Leader Post (Regina), Star Phoenix (Saskatoon), Dose, a wholly owned free commuter daily, and a one-third interest in Metro Ottawa and Metro Vancouver, free commuter dailies, together with 23 smaller community daily, weekly and bi-weekly publications. The assets also include online properties canada.com, working.com and driving.ca and related websites.
This news release contains certain comments or forward-looking statements that are based largely upon the Company’s current expectations and are subject to certain risks, trends and uncertainties. These factors could cause actual future performance to vary materially from current expectations.
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For full financial details click here
For additional information, please contact:
Doug Lamb, Executive Vice President and CFO
CanWest MediaWorks Limited Partnership
Tel:
Email:
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 CanWest MediaWorks Income Fund Distribution April 5 2006 with financials (44k) |
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