Postmedia Network Canada Corp. said Tuesday it lost $12.1 million in its latest quarter compared with a loss of $2.7 million a year ago, as the newspaper publisher worked to cut costs and transform itself.
“While we continue to face a challenging and uncertain outlook with respect to our traditional business model, we are aggressively launching initiatives that proactively support our transformation from a print newspaper publisher to a digital and audience focused media company,” CEO Paul Godfrey said.
“The changes we are making will produce a more nimble, forward-looking media company, capable of producing higher quality and better targeted products.”
The Globe and Mail quoted Godfrey as saying the vanishing revenues are not likely to reappear any time soon.
“Going forward we’ll be a smaller revenue company and a smaller expense company… My gut feeling is [revenue declines are] more structural than the economy,” Godfrey is quoted as saying. “We’ve got to build a new company in a different direction … it’s no longer about adjusting costs to revenue declines. It’s creating a new company for the present times.”
The loss for the three months ended May 31 amounted to 30 cents per share, compared with a loss of seven cents per share a year ago.
Revenue sank about 7% to $212 million for the period ended May 31, from $227.6 million last year, as advertising revenue fell 10% or about $14.5 million.
Postmedia said print circulation revenue fell $2.8 million or 5.1% from a year ago, while digital revenue increased $1.5 million or 6.8%.
Other revenue increased $300,000 relative to the same period last year.
Total operating expenses excluding depreciation, amortization and restructuring decreased $5.3 million or 2.9% compared with a year ago due to lower compensation, and newsprint and distribution costs, which were partially offset by an increase in other operating costs.
The Toronto-based media company said restructuring expenses helped drive operating income down to $4.1 million, $23 million lower than the same period last year.
Postmedia, formerly part of the Canwest media empire broken up in 2010, owns the Vancouver Province, the Vancouver Sun, the Edmonton Journal, the Calgary Herald, the Regina Leader-Post, the Saskatoon StarPhoenix and the Windsor Star, as well as the Canada.com website.
Earlier this year, the publisher said it was axing several of its Sunday papers and announced plans to cut an unspecified number of jobs in an effort to offset declining ad revenue.
Postmedia said combined with other cost-saving initiatives over the next two quarters, the company expects to save $35 million to $40 million annually.
As part of the changes, the company is expanding its Hamilton operations to handle the editorial production of newspaper pages.
Postmedia will also roll out its metered paywall to websites in additional markets with the intention of expanding it across all of its network.