Torstar Corp., owner of the Toronto Star newspaper, struggled to keep advertisers buying space in its flagship newspaper, even as a scandal involving Toronto Mayor Rob Ford gained momentum this summer.
The media company, which also owns Harlequin books and other community newspapers across Canada, says it lost $70.8 million in the third quarter, which factored in a 16.6-per cent slide in print advertising revenue at the Toronto Star.
The loss also included an $85.4-million writedown taken on the long-term value on some of its less successful media assets.
Torstar expects that advertisers will remain fickle as they look for alternatives to buying space in newspapers. The company noted a particular decline in advertising buys across its national platforms, particularly in automotive, real estate and retail.
"The media segment continued to face challenges as a result of shifts in spending by advertisers combined with economic uncertainty," said chief financial officer Lorenzo DeMarchi in a conference call.
"For the balance of the year, we expect print advertising revenues to continue to be under pressure, but we anticipate that distribution revenue will continue to grow."
DeMarchi noted the Star's dependence on condo advertising, a segment that is vulnerable to a downturn in the market.
As a result, Torstar had an overall loss of 89 cents per share in the third quarter, compared with a profit of $11.1 million, or 14 cents per share, in the same three months ended Sept. 30 last year.
On an adjusted basis, Torstar earned 21 cents per share, which met analyst expectations, according to a survey by Thomson Reuters, and came in a one cent higher than a year ago, after excluding the asset impairment, restructuring costs and some other items.
The latest quarter included a total of about $6 million in restructuring charges, mostly in the media division — actually about $1 million less than the year before.
Torstar's overall revenue was down 7.7 per cent from a year earlier, dropping to $328 million from $355.3 million in the third quarter of 2012.
The main newspaper moved behind a paywall in August, leading to a decline in page views for its internet edition.
The media division, which includes Torstar's newspapers, accounted for $227.4 million of the total revenue, about $20 million less than a year earlier, while revenue from book publishing was $100.6 million, nearly $8 million lower than in the third quarter of 2012.
Torstar says restructuring and cost reduction will continue to be a major focus to contend with lower revenues.
Torstar holds an investment in The Canadian Press as part of a joint agreement with the parent companies of the Globe and Mail and Montreal La Presse.