Newspaper publisher Torstar Corp. said Wednesday that advertising revenues are headed into another stretch of uncertainty as the turbulent economy causes some ad buyers to rein in their budgets.
President and chief executive David Holland told analysts that the company, which owns the Toronto Star newspaper and other media properties, saw the advertising environment weaken, particularly in September.
“The weakening trend that we experienced in the quarter continued into October,” Holland said. “Looking forward, our visability is quite limited given the uncertain economic outlook and environment we’re in.”
Torstar, which also owns the Harlequin book publisher, said its net profits jumped by 74% to $25.2 million for the third quarter ended Sept. 30. That was up from $14.5 million last year.
Revenue increased to $378.7 million from $353.7 million.
“Results continue to be mixed in 2011,” said Holland, in a release.
“EBITDA (earnings before interest taxes, depreciation and amortization) was down slightly, by $1.4 million to $53.7 million in the quarter, with improved Harlequin results offset by a modest decline in media.
“We view the third quarter results to be solid given the economic environment in which we are operating. The diversification of our asset base is serving us well in a challenging environment.”
Torstar made two newspaper acquisition deals in October. The Toronto-based company is paying $22.5 million to buy Performance Printing Ltd. of Smiths Falls, Ont., a publisher of community papers and ad flyers. It also announced it will pay $51.5 million to take nearly full control (90%) of the Canadian chain of Metro free daily newspapers, which are read by more than one million commuters each day.
In the previous quarter, the publisher of the Toronto Star newspaper acquired beauty website TheKit.ca and struck a deal to distribute print editions of satirical newspaper The Onion in the city.
The company has been struggling in the turbulent media market as readership declines as more people turn to the free digital format, where advertisers pay significantly less than they were in an already weak ad market.
Torstar has about 6,600 employees across its operations, which also includes digital properties including Thestar.com, Toronto.com, Travelalerts.ca, daily deal website WagJag.com, Workopolis, Olive Media, and EyeReturn Marketing.
