Charges send Canwest to $1.02B loss in Q4
Canwest Global Communications Corp. said Friday it lost $1.02 billion in its fourth quarter after the company took a charge of $1.01 billion to write down goodwill and the value of the broadcast licences of its Canadian conventional television operations.
The Winnipeg-based firm said the big charge reflected deterioration in short-term profit expectations for the company's Canadian conventional television business because of expected softness in advertising revenues.
The company also blamed the charge on "structural and regulatory challenges" facing the Canadian conventional television industry.
"We have seen impairment charges such as these in other large media companies throughout North America," said Canwest president and CEO Leonard Asper. "The sooner we recognize the new reality, the faster we can recalibrate our business and move it forward."
Canwest said its operating profit fell to $61 million, from $79 million year over year, while its overall revenues for the quarter were $726 million, up from $678 million last year.
Earlier this week, Canwest said it was cutting 560 jobs from its operations across the country. The elimination of 210 broadcast and 350 publishing jobs will involve voluntary buyouts, attrition and layoffs.
Canwest's publishing operations, which includes the National Post and other daily papers across the country, had a fourth-quarter operating profit of $54 million on revenue of $300 million. That compared to an operating profit of $57 million on revenue of $305 million a year earlier.
The company's Canadian television operations, excluding the specialty channels it acquired through its purchase of Alliance Atlantis, posted fourth-quarter revenues of $127 million, flat compared to revenues for the same period of the previous year. The group's operating loss of $19 million compared with an operating loss of $10 million for the corresponding period last year.
CW Media, which includes the Alliance Atlantis specialty channels, had revenues of $81 million and an operating profit of $19 million for the fourth quarter, an increase of five per cent and 57 per cent, respectively, year-over-year.
For its full year, Canwest lost $1.04 billion, compared with last year's profit of $279 million.
Asper encouraged people to look past the "noise" of the company's big writedown and its $3.7-billion debt load.
"We've got manageable debt because … it really is in four separate companies," Asper said. "The cash flows match the debt in each of the different subsidiaries."
Shares of Canwest slipped seven cents to close at 73 cents on the TSX. Earlier in the day, the stock hit a new 52-week low of 66 cents.
with files from Canadian Press