President Pierre Dion calls new provincial waste recovery fees “legally invalid” while TVA Sports and Sun News draw losses in TV
TVA Group Inc. posted a quarterly net loss of $39.3 million due to a multimillion dollar impairment charge related to Quebec government fees for waste recovery services, which the TV and publishing company could contest.
TVA Group had a loss of $1.66 per share in its first quarter, compared with a net income of $300,000 or a penny a share in the same quarter of 2011.
The Montreal-based television and magazine company said it took an impairment charge of $32.2 million in the quarter related to increased fees for waste recovery services provided by Quebec municipalities for 2010, 2011 and 2012.
President and CEO Pierre Dion said the new fees applied to magazines are arbitrary and “legally invalid.”
“They seriously compromise the financial viability and stability of an industry that makes a positive contribution to the cultural sector of our society,” Dion said in a news release.
“We are currently examining the legal remedies available to ensure that our rights are respected.”
TVA Group said the results in its publishing division were down almost $3.4 million because of the government fees. The television division reported a loss of more than $3.7 million, mainly due to an operating loss from its TVA Sports specialty channel and a higher loss for its Sun News TV channel.
“Our financial results in the television segment for the first quarter were affected by the investment in our new specialty channels and in TVA Network’s programming schedule,” Dion said.
TVA has an operating loss in its publishing division of just more than $2 million, mainly due to contributions for waste recovery services.
But operating income for the TV division grew more than 12% in the first quarter of 2012, both at TVA Network, where advertising revenues increased by nearly 10%, and at the specialty services, which grew subscription revenue by 43% and advertising revenue by 24%, he said.
Cash flows from operating activities were $3.1 million for the quarter, compared with $10.2 million in the same quarter of 2011.
TVA Group is a subsidiary of multimedia company Quebecor Inc.
