Profit at Canada's largest newspaper publisher slid by 67 per cent in the third quarter, a performance Torstar Corp. attributed to foreign exchange losses, restructuring charges and gains from the sale of property in the year-earlier period.

Profit fell to only $7.7 million or 10 cents a share in the three months ended Sept. 30, 2006, from $23.7 million or 30 cents in the year-earlier period, while revenue declined slightly to $366.2 million.

Torstar three-month trading

For the first nine months of 2006, profit fell by half to $43.1 million or 55 cents a share, down from $80.9 million or $1.04.

The Torstar quarterly report Wednesday contained a wealth of detail in its 25 pages that shows a company that is struggling in a competitive market, but is also taking significant steps to try to improve its operations.

At the flagship Toronto Star newspaper, quarterly losses rose to $1.8 million from $1.7 million in the same period last year, while sales slid to $97.1 million from $98.4 million. But Torstar's other newspaper divisions fared better in the third quarter, giving the newspaper segment a bottom line of $16.2 million, up 17 per cent on revenue of $247.4 million.

The Harlequin book publishing division also had its share of problems. Foreign currency losses reversed what would have been an otherwise good period, giving an operating profit of $14.4 million, down from $24.9 million in the year-earlier period.

But book publishing was not immune to operating woes. Book revenue fell in the key North American market even before the foreign currency effects were taken into account because of lower book sales and the bankruptcy of a key supplier.  

Robert Prichard, Torstar's president and chief executive officer, reassured investors that he was taking strong action to improve the company's bottom line.

"During the quarter, we have taken significant steps to strengthen our businesses."

Prichard said he has merged newspaper divisions, outsourced the circulation call centre, cut the workforce and costs at Harlequin and reduced corporate costs. He has increased ownership in the internet job site Workopolis.com and strengthened the digital operations.

At the Star, Prichard recently replaced publisher Michael Goldbloom with Jagoda Pike, who has held a variety of senior positions within the organization, including publisher of the Hamilton Spectator, while editor-in-chief Giles Gherson was replaced by Fred Kuntz.

"These (organizational) changes have simplified and strengthened our overall business and better positioned it for the future," Prichard said.