Second-quarter profits at directory publisher Yellow Pages Income Fund dropped by almost 14 per cent to $116.8 million as the economic downturn took its toll, the greatest impact felt at its Trader brand.

Trader, a publisher of items-for-sale directories, experienced its most difficult quarter to date, Yellow Pages said Thursday. Second-quarter revenues at the division were $66.5 million, a drop of more than 26 per cent compared with the second quarter of last year.

Yellow Pages 3-month TSX chart "We are facing the headwinds of the recession in managing our business with prudence and success," president and CEO Marc Tellier told a conference call.

But Yellow Pages said it will focus on a new revenue model and keep costs down to position Trader for the economic recovery next year.

Tellier said he believes the telephone and internet directory company as a whole showed a solid performance under difficult economic conditions.

Distributable cash per unit for the quarter ended June 30 was 35 cents, down a penny from the second quarter of 2008. Distributable cash was $181.7 million, compared with $190.9 million for the same period in the previous year.

Online revenues for directories and vertical media combined were $75.2 million for the quarter. That compared to $61.4 million in the second quarter of 2008, about $300 million on an annualized basis, and represents organic growth of 23 per cent in the quarter.

"In the face of challenging economic conditions, the priority in directories continues to be the introduction of new products," the company said.

For the quarter, income from operations was $169.5 million, including restructuring and special charges of $20.6 million, compared with $185.1 million for the same quarter in the prior year.

Cash flow from operating activities in the second quarter of 2009 was $185.5 million compared to $181.8 million in 2008.

As part of its commitment to the environment, the company introduced the Yellow Pages EcoGuide during the quarter. Developed in collaboration with environmental and municipal organizations, the EcoGuide is located in the front of all new Yellow Pages directories.

It includes local environmental services, a household items disposal guide, a list of environmental certifications as well as ways to help Canadians reduce their ecological footprint.