TORONTO - The company that owns the National Post and other big-city Canadian newspapers has reported an $11.8-million net loss in the first quarter of fiscal 2014.
Postmedia Network Canada Corp. (TSX:T.PNC.B, Stock Forum) said the loss was primarily due to a $15.3-million increase in restructuring expenses related to the company's outsourcing of printing operations.
A year earlier, Postmedia had $6.7 million of net income in the comparable quarter, which covers September, October and November.
Postmedia's revenue for the quarter ended Nov. 30 was down eight per cent from a year earlier, falling to $194 million from about $212 million in the first quarter of fiscal 2013.
The main cause of the lower revenue was reduced print advertising sales while digital revenue fell by $1.3 million or five per cent.
Like most of the newspaper industry, Postmedia has been grappling with a years-long trend in which readers and advertisers turn away from print publications to digital media including web sites. But the company has been far more aggressive in staff cuts, outsourcing, centralization, and product contraction than others in the business, which has seemingly made it harder to find a revenue base to come back from.
Postmedia's loss for the three months ended Nov. 30 amounted to 29 cents per share, compared with 16 cents per share of net income in the first quarter of fiscal 2013.
However, operating expenses excluding depreciation, amortization and restructuring items fell by $14.7 or nine per cent from a year before.
In November, the company outsourced the production of the Calgary Herald and said it would also outsourcing contracts for the print production of both the Vancouver Sun and the Province. Cuts to advertising sales staff in Vancouver took place in mid-2013, adding to the revenue slide.
“We continue to face significant revenue challenges as a result of a rapidly changing advertising market,” CEO Paul Godfrey said in a statement.
“In spite of these challenges, however, we are very pleased with the progress we have made in stabilizing circulation revenue, deepening insights into our audiences across multiple platforms, and transforming our cost structure to match the realities of the business.”
Shares in the rarely traded company were unmoved on the news.