NZ operations help prop up CanWest

1.00pm

CanWest Global Communications Corp's New Zealand and Australian operations helped prop up Canada's No 1 media group in the second quarter.

The Winnipeg-based broadcaster and newspaper publisher, which owns TV3, today reported a hefty second-quarter loss after taking charges to shut down its Fireworks Entertainment arm.

It reported a loss of $C211 million ($253 million) for the quarter ended February 29, compared with a profit of $C10 million a year earlier.

CanWest warned on Friday the results would include a non-cash charge of about $C200 million to shut down Fireworks Entertainment, which produced and distributed shows that included Relic Hunter, Mutant X and Beastmaster.

On a combined basis, including the company's 56.6 per cent share of Australia's Network TEN, combined revenues of $C586 million for the quarter were 2 per cent higher than revenues on the same basis for the same quarter last year.

The higher revenue reflected strong results in Canadian publishing and all its "South Pacific" operations, CanWest said.

CanWest's TV3 and C4 television networks in New Zealand reported ebitda (earnings before interest, tax, depreciation and amortisation) of $C3 million compared to a small loss for the year ago quarter. Revenue rose to $21.8 million from $19.2 million.

CanWest 's New Zealand radio assets, which include The Edge, The Rock, MoreFM, The Breeze, Solid Gold, Radio Pacific, Channel Z and LocalWorks radio stations and networks, reported a 47 per cent rise in ebida to $C8 million. Revenue rose to $C23.1 million from $C19.2 million.

For the half year, TV3 and C4 posted an operating profit of $C12.9 million against $C7 million a year earlier of revenue of $C52.7 million against $C45.4 million.

The New Zealand radio networks posted a six month operating profit of $C15.0 million against $C10.7 million on revenue of $C44.4 million against $C37.0 million.

Australia's Ten saw its profit rise to $C28.2 million from $C18.9 million.

CanWest's subordinate voting stock rose 41 Canadian cents, or 4 per cent, to $C11.10 in Toronto, on a volume of more than 339,000 shares, following the results.

"They were right where we were looking for," said one Toronto-based media analyst.

Fireworks is now classified as a discontinued operation. CanWest said that excluding its loss and other non-cash charges, its loss would have been $C2 million.

Sales at its Canadian television arm, owner of the Global Television Network, CanWest's largest single broadcast business, fell 6 per cent to $C161 million. Global reported poor advertising sale.

In a statement on Wednesday, CanWest chief executive Leonard Asper said the network's performance is still "disappointing".

"We knew it was going to be rough. There is some optimism in the company's statement that there was a positive comparison in the month of February ... so hopefully things are turning up," the analyst said.

"The question is how the back half of the year is going to look and how they're tracking in terms of their advertising.

"How much money they're going to make off the finale of 'Friends' and 'Frasier'," he added.

Overall television revenues rose about 4 per cent to $C272 million when foreign operations were included.

Revenues at its newspaper and online operations, which include Toronto's National Post, the Montreal Gazette, Ottawa Citizen and Vancouver Sun, fell to $C275 million from $C280 million.

The decline was largely due to the sale last February of CanWest's smaller Ontario newspapers.

- NZPA