Torstar Corp., owner of the Toronto Star newspaper, struggled to keep advertisers buying space in its flagship newspaper, even as a scandal involving Toronto Mayor Rob Ford gained momentum this summer.
The media company, which also owns Harlequin books and other community newspapers across Canada, says it lost $70.8 million in the third quarter, which factored in a 16.6% slide in print advertising revenue at the Toronto Star.
The loss also included an $85.4-million writedown taken on the long-term value on some of its less successful media assets.
Torstar expects that advertisers will remain fickle as they look for alternatives to buying space in newspapers. The company noted a particular decline in advertising buys across its national platforms, particularly in automotive, real estate and retail.
“The media segment continued to face challenges as a result of shifts in spending by advertisers combined with economic uncertainty,” said chief financial officer Lorenzo DeMarchi in a conference call.
“For the balance of the year, we expect print advertising revenues to continue to be under pressure, but we anticipate that distribution revenue will continue to grow.”
As a result, Torstar had an overall loss of 89 cents per share in the third quarter, compared with a profit of $11.1 million, or 14 cents per share, in the same three months ended Sept. 30 last year.
On an adjusted basis, Torstar earned 21 cents per share, which met analyst expectations according to a survey by Thomson Reuters, and came in a one cent higher than a year ago, after excluding the asset impairment, restructuring costs and some other items.
The latest quarter included a total of about $6 million in restructuring charges, mostly in the media division – actually about $1 million less than the year before.
Torstar’s overall revenue was down 7.7% from a year earlier, dropping to $328 million from $355.3 million in the third quarter of 2012.
The media division, which includes Torstar’s newspapers, accounted for $227.4 million of the total revenue, about $20 million less than a year earlier, while revenue from book publishing was $100.6 million, nearly $8 million lower than in the third quarter of 2012.
Torstar says restructuring and cost reduction will continue to be a major focus to contend with lower revenues.
