TORONTO – Postmedia Network Canada Corp. lost $3.9 million in its third quarter as the newspaper and digital publisher pulled in less print advertising revenues and had higher expenses.
The owner of the National Post newspaper and other major media properties said the loss amounted to 10 cents per share on $259 million in revenue, mainly from advertising, for the three months ended May 31.
The company said Tuesday that consumer confidence was shaky during the quarter and advertisers responded by holding back.
“I think that we’ve had a couple of quite good months and then you have one bad month. We don’t seem to have any real trend taking place,” Postmedia CEO Paul Godfrey said on a conference call, describing the situation as “choppy.”
Godfrey said national advertising was up, but retail classified ads were down, as retailers dealt with consumers worried a recession could return, and the HST in British Columbia deterred shoppers from making big-ticket purchases.
“There’s a lot of uncertainty out there which I think is creating people to sit on their hands for a while,” he said.
He said Postmedia (TSX:PNC.A), is seeing some signs of improvement in the early weeks of the fourth quarter, but revenue visibility “remains poor.”
Godfrey’s comments echo those made by rival Torstar Corp. (TSX:TS.B). The publisher of the Toronto Star also reported lower print advertising revenues during its first quarter in May, saying it is hard to predict the print advertising environment and the pace of economic recovery.
Year-earlier figures for Postmedia aren’t directly comparable because the newspapers were still part of Canwest, which was undergoing a court-supervised restructuring that saw its television assets go to Shaw Communications (TSX:SJR.B) and its newspaper division going to creditors that helped form Postmedia.
In the third quarter of its 2010 financial year, the Canwest papers recorded a profit of $40.6 million with $270 million of revenue. In the first nine months of its 2010 financial year, the company reported a $94.9-million profit and $811 million in revenues.
For the first nine months of its 2011 financial year, which ended May 31, Postmedia lost $10.6 million or 26 cents per share on $788 million in revenue.
Postmedia, which began trading on the Toronto Stock Exchange last month, recorded an $11-million loss on debt prepayment, versus zero in the same quarter last year.
Godfrey said the company’s team is focused on new approaches for delivering content, and providing solutions for advertisers and marketers, repaying debt and accelerating revenue generating opportunities.
The company owns 11 English-language daily newspapers including the National Post, Vancouver Sun and Ottawa Citizen as well as the Canada.com website, online versions of its daily papers and deal-a-day website SwarmJam.com.