Postmedia posts net loss of $25.3 million in second quarter
The media company saw a nine per cent decrease in revenue relative to the same period last year, primarily because of falling print advertising, which decreased by $15.5 million or 14.7 per cent.
By Tamara Baluja, Associate Editor
Postmedia Network posted a net loss of $25.3 million in its second quarter, compared to $15.8 million in the same period the prior year.
The media company saw a nine per cent decrease in revenue relative to the same period last year, primarily because of falling print advertising, which decreased $15.5 million or 14.7 per cent. Meanwhile, print circulation sales and digital revenue fell 0.7 per cent.
“We are seeing similar effects on print advertising revenues as our industry peers,” CEO Paul Godfrey said in a memo to employees. “Our strategy is focused on developing new products and reengineering the way we produce and distribute content.”
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Recently, Postmedia outsourced the production of four newspapers—Edmonton Journal, Calgary Herald, Vancouver Sun and The Province (in Vancouver)—as part of its three-year restructuring plan to reduce costs by 15 to 20 per cent. As a result of this and other restructuring initiatives, Postmedia achieved approximately $11 million in savings in the second quarter, bringing its total net cost savings since the beginning of the program to $98 million.
The Toronto-based company also hopes to pay down its debt by selling off properties, such as the Calgary Herald building. “We currently have several high value real estate holdings on the market and while we can’t speculate on their ultimate selling price, once they are sold we will apply the net proceeds to pay down debt,” Godfrey added.
Postmedia is banking on the success of its new four-platform strategy, which will be rolled out this spring and provide content specific to print, desktops, tablets and smartphones.
“This new approach will also allow us to harness the power of our mobile audiences, which continue to grow at an accelerated rate and now account for a majority of our digital traffic,” Godfrey said. “Our paid content subscribers, now more than 140,000, will find richer content presented in a more engaging way and we believe more of our online visitors will be motivated to sign up.”
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Tamara Baluja is an award-winning journalist with CBC Vancouver and the 2018 Michener-Deacon fellow for journalism education. She was the associate editor for J-Source from 2013-2014.