Postmedia Network ended its first quarter with an $11.8-million net loss, a decrease of 8.4 per cent compared to the same period the previous year.
Postmedia Network ended its first quarter with an $11.8-million net loss, a decrease of 8.4 per cent compared to the same period the previous year. Revenue for the quarter was $194.0 million, a decrease of $17.7 million.
“The increase in net loss was largely due to a $15- million increase in restructuring expenses, primarily associated with print production outsourcing, an increase in depreciation expense and a modest decline in operating income before depreciation, amortization and restructuring, all as compared to the same period in the prior year,” the company said in its earnings report.
In a memo sent to employees, Godfrey said the decrease was primarily due to a 12.2 per cent decline in print advertising revenue. The largest decline was in classified ads, which was down 24 per cent. Digital revenue also fell 5.1 per cent to $24 million.
“We continue to face significant revenue challenges as a result of a rapidly changing advertising market,” said CEO Paul Godfrey in a statement. “In spite of these challenges, however, we are very pleased with the progress we have made in stabilizing circulation revenue, deepening insights into our audiences across multiple platforms, and transforming our cost structure to match the realities of the business. As the newspaper industry continues to transform, we are confident that we are positioning the company for future success.”
Since it started a three-year restructuring program to cut costs by 15 to 20 per cent, Postmedia has made cost savings of approximately $87 million, or 12.5 per cent of operating costs since July 2012. The company has introduced paywalls on all its newspapers, outsourced the print production of several of its newspapers and either sold off or leased some of its properties across the country.
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In an investors’ call Thursday afternoon, chief operating officer Wayne Parrish said he’s confident the company can realize the intended goal of 20 per cent, and as part of that, all options are being considered, including the outsourcing of print production of more newspapers.
Godfrey said the company plans to launch a redesign of eight of its 10 newspapers, although it did not specify which newspapers, and The Ottawa Citizen will launch a tablet product in the coming months, the Financial Post reported.
In the memo, Godfrey said more than 135,000 people have signed up for digital access. Parrish said the National Post has a greater uptake in “pure” digital subscriptions, compared to the Postmedia’s metro newspapers.
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