Postmedia reported their third quarter earnings yesterday, and to say that things are not looking good is a big understatement. The company reported a $12.1 million net loss, a major decrease in operating income and fewer print advertising and circulation revenues. Some of the results can be attributed to expenses associated with the company’s attempts to shift away from legacy costs and toward practices that would make it leaner, which include a stronger digital focus. Last month the company announced a number of restructuring measures as part of a three-year transformation plan that is aimed to help reduce 15 to 20% of Postmedia’s operating costs. Some of the changes include cutting jobs at a number of papers, imposing paywalls on some of its newspapers’ websites, suspending a number of Sunday editions (or Monday, in the case of the National Post), and moving production to a centralized newsroom in Hamilton, ON.
“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,” Chief Executive Paul Godfrey said in a statement.
Digital revenues did see an increase of 6.8 per cent relative to the same period last year, compared to a minor 0.5 per cent growth in this year’s second quarter and a decline of 1.4 per cent in the first quarter. Lamb said yesterday that this quarter’s growth is more on par with what they expect moving forward.
In the quarter ended May 31, Postmedia made total debt repayments of US$7.5 million. Its outstanding long term debt now consists of US$240.0 million under a term-loan credit facility and US$268.6 million in the form of senior secured notes.
Last month Postmedia made a deal to sell its headquarters in Toronto to the Rose & Thistle Group for about C$24 million. The proceeds of the sale will be used to repay debt.