Torstar Corp. is reporting a $1.5 million profit for the third quarter, helped by cost reductions and $53.6 million from the previously announced sale of its Vaughan printing plant.
However, the newspaper and digital media company said its Metroland and Star groups continued to face a challenging market for print advertising in the early stages of the fourth quarter.
Torstar’s total operating revenue for the three months ended Sept. 30 was $162.1 million, down from $185.4 million a year earlier.
Net income included $400,000 from discontinued operations and $1.08 million from continuing operations.
The profit for the owner of the Toronto Star and other media businesses was an improvement over the year-earlier loss of $164.3 million that accounted for a reduced long-term revenue projection due to reduced advertising.
“We were pleased, overall, with our progress in the quarter,” said David Holland, Torstar’s outgoing president and CEO.
He noted Torstar received $53.6 million in net proceeds from the sale of its printing plant and contributions from its investment in VerticalScope, one of the company’s digital business initiatives.
He also said, as anticipated, this year’s third quarter included reduced spending on Toronto Star Touch — a tablet-only edition of its flagship newspaper — which was launched in late 2015.
“We remain very committed to a multi-platform evolution across our media operations, and led by VerticalScope, a meaningful transformation of our asset base towards a more digital orientation for Torstar as a whole.”
Over the first nine months of 2016, Torstar cut 570 positions — including at the printing plant — and expects $34.0 million of annualized savings by the end of 2017 including $9.9 million in the fourth quarter of this year.
Its net investment in Toronto Star Touch was $10.1 million in the first nine months of this year. A further $1.5 million investment is anticipated in the fourth quarter, down from $9.6 million in the fourth quarter of 2015.
For next year, Torstar expects to invest between $2 million and $4 million for the full year on Star Touch.
Holland — who has announced plans to retire this fall — said in August the tablet edition hadn’t lived up to management expectations. He said the audience, while loyal and engaged, was smaller than anticipated.
