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Category Investors Date 11/2/2006 |
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CanWest MediaWorks Income Fund reports Q4 and year-end results
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| Reports revenue and EBITDA1 growth |
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Toronto , Ontario - CanWest MediaWorks Income Fund (the "Fund") today reported financial results for CanWest MediaWorks Limited Partnership (the “Partnership”) for the fourth quarter and the twelve months ended August 31, 2006.
Revenue for the fourth quarter was $274.4 million, a 1% increase over the $271.4 million reported for the same quarter last year. National and online classified advertising experienced growth during the quarter relative to same period in the prior year. Weakness continued in print classifieds and retail advertising was flat. Circulation revenue was up for the quarter compared to one year ago, with higher revenue per copy offsetting a small decline in the number of copies sold. Interactive revenues increased 19% to $9.0 million for the quarter from $7.6 million in the fourth quarter last year. FPInfomart also made gains compared to the previous year.
EBITDA for the fourth quarter was $58.6 million, an increase of 30% from the $44.9 million reported for the fourth quarter of fiscal 2005. The positive impact of cost containment initiatives implemented earlier in the year, as well as savings resulting from closure of the print version of Dose contributed significantly to the improvement. EBITDA losses from Dose and Metro totaled $0.8 million in the fourth quarter of 2006 compared to $4.7 million in the fourth quarter of 2005. Also contributing to EBITDA improvements were lower employee severance costs which decreased from $2.4 million in the fourth quarter of 2005 to $0.8 million in 2006.
Distributable cash 2 for the fourth quarter was $40.2 million or $0.19 per unit. Cash distributions for the quarter were $0.23 per unit. Due to the seasonal nature of newspaper advertising revenue, it was expected that distributable cash in the first and third quarters would exceed actual distributions and would be more than sufficient to offset anticipated shortfalls in the second and fourth quarters.
Net earnings for the quarter were $46.5 million compared to a net loss of $4.9 million in the fourth quarter of fiscal 2005. The increase in net earnings primarily reflects reduced interest expense and income tax expense following the change in corporate structure to a Limited Partnership in October 2005.
Commenting on the results for the fourth quarter and the year, Peter Viner, President and Chief Executive Officer of the Limited Partnership said, “The major story in the quarter was the positive impact on earnings of our earlier cost containment initiatives including closure of the print version of Dose. We are optimistic these savings will contribute to continued EBITDA improvements in fiscal 2007. Although revenue growth was modest in Q4, we were pleased to see a significant rebound in national advertising and continued growth in our online classified products. We are also pleased to report that total distributions represented 95% of distributable cash for fiscal 2006, consistent with the payout ratio estimated at the time of our IPO.”
Results for the twelve months ended August 31, 2006
Revenue for the twelve-month period was $1,167.2 million, a gain of 3% from $1,135.8 million in fiscal 2005. Revenue growth for the year was more heavily weighted to the newspapers in the buoyant economies of Alberta and British Columbia and was achieved despite weakness during the year in some segments of the advertising market and continuing weakness in classified advertising. 92% growth in online classified revenues partially offset the decline in newspaper classified advertising.
EBITDA for the twelve-month period was $263.6 million compared to $252.3 million for fiscal 2005. EBITDA for fiscal 2005 was affected by $16.8 million in costs associated with the Ravelston management services contract. The EBITDA for fiscal 2006 was affected by severance charges and continuing start-up losses at Metro and Dose. For the twelve-month period, Dose and Metro losses (including Dose restructuring costs) totaled $11.9 million compared to $8.0 million in the prior year. Severance (excluding amounts related to Dose) totaled $9.1 million compared to $3.2 million in the prior year.
Distributable cash for the period October 13, 2005 to August 31, 2006 was $188.3 million or $0.88 per unit. Distributions declared for the period October 13, 2005 to August 31, 2006 were $0.84 per unit representing 95% of distributable cash.
Net earnings for the year ended August 31, 2006, were $160.7 million compared to $25.7 million for fiscal 2005. As for the quarter, the increase in net earnings primarily reflects lower interest expense and reduced tax liabilities following the change in corporate structure to a Limited Partnership in October 2005.
Department of Finance Announcement
On October 31, the Minister of Finance announced important changes in the tax treatment applicable to publicly traded income trusts. The changes, to be implemented in 2011 for existing income trusts, will have implications for cash distributions to unitholders and for the market value of trust units. The Company is currently assessing its response to these implications.
Basis of Presentation
The Publications Group, formerly owned by CanWest MediaWorks Inc., was acquired by CanWest MediaWorks Limited Partnership (the “Limited Partnership”), in which, the Fund acquired an approximate 26% interest effective October 13, 2005
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 May 31, 2006. The comparative period for the year months ended August 31, 2005 covers the combined consolidated financial results of the Publications Group.
Caution Concerning Forward-Looking Statements
This news release contains certain comments or forward-looking statements about the objectives, strategies, financial conditions, results of operations and businesses of the Fund. Statements that are not historical facts are forward-looking and are subject to important risks, uncertainties and assumptions. These statements are based on our current expectations about our business and the markets in which we operate, and upon various estimates and assumptions. The results or events predicted in these forward-looking statements may differ materially from actual results or events if known or unknown risks, trends or uncertainties affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that the circumstances described in any forward-looking statement will materialize. Significant and reasonably foreseeable factors that could cause our results to differ materially from our current expectations are discussed in the section entitled "Risk Factors" contained in our Annual Information Form dated January 31, 2006 filed by CanWest MediaWorks Income Fund with the Canadian securities commissions (available on SEDAR at www.sedar.com), as updated in our most recent Management's Discussion and Analysis for the three months and twelve months ended August 31, 2006 dated November 2, 2006. We disclaim any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.
The company will hold its regular quarterly conference call with analysts on November 2, 2006 at 10:00 a.m. Eastern Standard Time. The call-in numbers are or . Replays are also available for five days following the call at or using the pass-code 21205352#.
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 a 25.8% 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), 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, driving.ca and renting.ca and related websites.
CanWest MediaWorks Limited Partnership is 74.2% owned by CanWest Global Communications Corp. (www.canwestglobal.com), ( TSX: CGS and CGS.A, NYSE: CWG). CanWest, an international media company, is Canada’s largest publisher of daily newspapers and also owns, operates and/or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, Web sites and radio stations and networks in Canada, New Zealand, Australia, Singapore, Indonesia, Malaysia, Turkey, the United Kingdom and United States.
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For full 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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