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Corus Entertainment Inc T.CJR.B

Alternate Symbol(s):  CJREF

Corus Entertainment Inc. is a Canada-based media and content company that develops and delivers brands and content across platforms for audiences around the world. The Company's segments include Television and Radio. Its portfolio of multimedia offerings encompasses approximately 32 specialty television services, 37 radio stations, 15 conventional television stations, digital and streaming platforms, and social digital agency and media services. Its brands include Global Television, W Network, Flavour Network and Home Network (launching soon), The HISTORY Channel, Showcase, Adult Swim, National Geographic and Global News, along with streaming platforms STACKTV, TELETOON+, the Global TV App and Curiouscast. It is also the domestic advertising representative and an original content partner for Pluto TV, a Paramount Company, which is the free ad-supported streaming television service. It is an international content creator, producer and distributor through Corus Studios and Nelvana.


TSX:CJR.B - Post by User

Post by Muncheron Jan 13, 2023 9:52am
238 Views
Post# 35220797

TD remains positive low chance of divy cut

TD remains positive low chance of divy cutRevenue and EBITDA exceeded our estimates in TV/radio/consolidated in Q1/23 (TV advertising revenue -11% y/y versus our -13% estimate). However, the results fell short of consensus and there is no visible light at the end of the advertising recession tunnel at this point, so many analysts and investors are likely to cite these results as the beginning of the end for this company. We would strongly disagree, and a simple look forward to fiscal 2024 (which starts in 7.5 months) should bring easier y/y comps, lower mandated Canadian content costs, and what we have always seen in the media/advertising business in every business cycle, which is a rapid recovery in ad spending post-recession. Then we could see favourable regulatory reforms kick in by fiscal 2025. Opportunistic long-term investors should sharpen their pencils and look for a great entry point between now and March 15. Why that date? Because the Board deferred declaration of the quarterly dividend owing to macro uncertainty, and they have until March 15 to declare the calendar Q1 payment. We see low odds of a dividend cut and we suspect that the company is just being prudent in allowing for a few more weeks of visibility on advertising demand trends before making the dividend decision. They did this before on April 1, 2020 (owing to initial pandemic uncertainty), and then ultimately declared the normal dividend on the last date allowed, which was June 9, 2020. Note that debt/ EBITDA increased in Q1/23 (3.38x versus 3.02x), but this was owing to the cyclicallydepressed EBITDA and not higher debt. Net debt was basically flat in the quarter at $1.344 billion versus $1.341 billion (with that small increase being $2 million in share buybacks). So unless we see another big step down in EBITDA in 2024, there should be no fear of reaching the debt covenant of 4.25x. Total revenue $431 million versus TD/consensus $428mm/$433mm. Total EBITDA $132 million versus TD/consensus $122mm/$135mm. Television EBITDA $132 million versus TD/consensus $122mm/$136mm). Adjusted EPS $0.17 versus TD/consensus $0.16/$0.25.
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