TVA Group Inc. says it will suspend its dividend payments as the broadcaster spends more to launch several new channels, including Sun News.
The Quebec-based broadcaster, a unit of Quebecor Media Inc., said Monday that “significant investments” in the company and the launch of several specialty channels are the reasons for the suspension.
In May, TVA Group declared a dividend of five cents a share to Class A and B shareholders. The company had nearly 19.5 million non-voting Class B shares in mid-March so the dividend suspension would save the broadcaster nearly $1 million in cash on the B shares alone.
In its financial report, TVA said its net profit attributable to shareholders increased to $13.8 million, or 58 cents per share, in the second quarter ended June 30.
That compared with $11.7 million, or 49 cents per share a year ago.
Revenues rose to $117.5 million from $110.9 million.
“The revenue increases enable us to push ahead with our investment strategy while reducing the short-term impact on our results,” said president and CEO Pierre Dion.
During the quarter, operating income dropped to $22.4 million from $26.8 million as the company put more money into the development of its new TV channels, Sun News and Mlle, a female-skewing French-language channel.
TVA is also developing a sports channel that launches next month.
The company noted that advertising revenues were up 9.6% at the main TVA network, and increased 27.7% in its specialty channels.
TVA’s board said it does not anticipate redeeming its shares in the coming months, according to the normal course issuer bid.
TVA Group is the largest broadcaster of French-language entertainment, information and public affairs programming and publisher of French-language magazines in North America.
The company, which employed more than 1,400 people at the end of 2008, also operates Sun News, a Canada-wide English-language news and opinion specialty channel.
