Revenues for Canada’s private radio stations fell for the second consecutive year in 2015, according to the latest data from Statistics Canada, dropping 0.6% to $1.6 billion.
The profit margin before interest and taxes (PBIT) rose 0.4% to 19%, with total profits of $304.6 million. The increase is attributable to a 0.9% decrease in operating expenses, to $1.3 billion, created by a 5.5% drop in administrative expenses.
Advertising accounted for 98.4% of total operating revenues, with local advertising of $1.1 billion accounting for 66.7% of total revenues, a 1% decline from 2014; national and network advertising accounted for 31.7% of operating revenues (a 0.9% increase from 2014).
Private broadcasters attracted a total of $1.58 billion in 2015, a 0.6% decline from $1.59 billion the previous year, with AM stations recording a drop of 1.6% from $283.4 million to $279 million and FM stations a more negligible decline of 0.4% (from $1.306 billion to $1.301 billion).
The country’s five largest census metropolitan areas saw advertising revenues decline 0.4%, from $711.7 million to $709 million.
The Atlantic Provinces and Saskatchewan were the only regions to record growth of 1% or higher last year, with PBIT for the Atlantic Provinces rising 1.7% to 16.8%. The PBIT for Saskatchewan stations was 10.4%, a 1% increase from the previous year.
The Quebec sector saw a “slight increase” in profit margin, 0.1%, with a PBIT of $56.3 million. Alberta-based broadcasters were the country’s most profitable, with pre-tax profit of 22.5%, a 0.3% increase from 2014.
Ontario ranked second in total profitability in 2015, registering a pre-tax margin of 22%, up from 21.7% in 2014. In Manitoba, the profit margin rose to 11.9% from 11.4%, attributable to a $764,000 increase in operating revenues.
In British Columbia and the territories, a 1% decrease in operating expenses yielded a 0.1% increase in profit margin.
The profit margin for the AM sector increased to 6% from 4.6% in 2014, the result of what Statistics Canada called a “notable decrease” in operating expenses, which fell 3.1% to $268.7 million. The total number of AM stations fell by three to 123 last year.
Profits in the FM sector fell 0.2% to $1.3 billion, with PBIT before interest and taxes up slightly to 21.8% from 21.7% the previous year. PBIT for the sector totalled $287.4 million.
While operating revenues for the country’s ethnic radio stations rose 1.9% to $49.5 million, their PBIT fell to 14.5% as a result of a 2.5% increase in operating expenses.
