Quebecor won’t rule out further cost-cutting efforts to address declining advertising revenues facing its newspaper business, outgoing CEO Pierre Karl Peladeau said Wednesday.
“For now our activities are profitable,” he said following the company’s annual meeting.
“We’re not burying our heads in the sand. We are in decline, there is a significant pressure on advertising revenues.”
A series of cost reductions, including 500 job cuts announced last year, are expected to generate $45 million a year in savings.
Peladeau said Quebecor is completing those cost reductions but said “a company is always attentive to the environment as it evolves.”
Quebecor’s overall profits were cut in half compared with a year ago, in part due to the impact of lower ad revenues in its news media segment.
The majority owner of Quebecor Media reported Thursday a profit of $35.6 million or 57 cents per share, compared with $71.4 million or $1.13 per basic share in the first quarter of 2012.
Consolidated revenue fell $9.5 million, or 0.9%, to $1.05 billion.
Adjusted income from continuing operations was $33.1 million or 53 cents per share, down from $37.8 million or 60 cents per share in the prior-year period.
The company was expected to earn 62 cents per share in adjusted profits on $1.09 billion of revenues, according to analysts polled by Thomson Reuters.
Peladeau declined to say whether Quebecor would consider selling its newspapers, particularly in English Canada, where it operates Sun Media.
He said those are strategic options would be decided by the new Quebecor board.
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Declining advertising revenues is a global problem facing other publishers in Canada and the United States, he told reporters.
Torstar, Postmedia and Gannett newspapers have all recently reported lower profits caused by newspaper advertising weakness.
The publisher of the Toronto Star said Wednesday it hopes paywalls it will launch will offset some of the declining revenues.
Peladeau said those efforts have allowed its newspapers including Le Journal de Montreal, to partially offset lower ad revenues.
The company has also focused on developing its online business to give readers access to information on a variety of platforms.
He described rival La Presse‘s new iPad newspaper as an alternative approach to what most in the industry are following.
“It’s an exception. Either they are smarter than others or they have a business model that’s a bit different,” he said.
