Yellow Media Ltd., which had a major financial restructuring to help it transform to a digital company, has reported a lower adjusted profit of $24 million in the fourth quarter.
“Our business continues to experience a decline in revenues, as online growth is currently unable to fully compensate for print revenue pressure,” president and CEO Marc Tellier said in remarks accompanying the results on Tuesday.
“This trend was expected and we do not anticipate it to reverse in the near future,” Tellier added.
The $24-million adjusted profit, before impairment charges and a major gain on settlement of debt, was down from net earnings from continuing operations of $48.2 million in the same 2011 period.
In its fourth quarter, revenue declined by more than 15% to $264.5 million from $313.3 million in the same 2011 quarter.
That was mainly due to lower print revenues, the discontinuation of duplicate directories published by Canpages, the divestiture of LesPAC.com, and the sale of Deal of the Day.
On a comparable basis, fourth-quarter revenues from continuing operations decreased by 9.7% versus last year’s results.
In the quarter, online revenues represented about 38% of total revenues, compared with 29% in 2011.
For fiscal 2012, revenues decreased 16.6% to 1.1 billion, compared with $1.33 billion last year. The decline is due mainly to lower print revenues, the discontinuation of duplicate directories published by Canpages, the divestiture of LesPAC.com in November 2011, and the sale of Deal of the Day in August 2012.
For the fiscal year, online revenues grew to $367.2 million compared with $346.1 million the year prior, representing growth of 6.1%.
As of Dec. 31, Yellow Media had 309,000 advertisers, excluding Canpages. During the year, the company experienced an advertiser renewal rate of 86% and acquired about 17,000 new advertisers.
The latest quarter’s adjusted earnings included a $300-million impairment charge related to certain intangible assets on property, plant and equipment, and a gain of some $995 million on a debt settlement.
Yellow Media’s recapitalization plan was approved last fall by Quebec Superior Court after getting the go-ahead from debtholders, shareholders and convertible debenture holders.
The restructuring saw the company’s various creditors exchange their debt for a combination of cash and new secured and unsecured debt as well as new shares and warrants in Yellow Media depending on their holdings.
Yellow Media had approximately $782 million of net debt as of Dec. 31, compared with $2.1 billion of net debt at the same time in 2011.
