Corus Entertainment Inc. (TSX: CJR.B) announced its second quarter and six months year‐to‐date financial results Thursday.
“The second quarter business results were soft, as expected, but we were able to end the first half of the year with significant increases in year‐to‐date free cash flow and improved margins,” said John Cassaday, President and Chief Executive Officer of Corus Entertainment. “The highlight of the quarter was the successful refinancing of our Senior Unsecured Guaranteed Notes, which resulted in a 300 basis point reduction in our financing costs. This activity was followed up by a series of significant transactions subsequent to the quarter, certain of which are subject to CRTC approval, which will enable us to expand our presence in Radio, consolidate our position in TELETOON and ABC Spark, enter the Quebec specialty television market and realize substantial gains on the sale of our minority interest in the Food Network (Canada) and on the revaluation of TELETOON.”
Consolidated Results from Continuing Operations
Consolidated revenues for the three months ended February 28, 2013 were $183.7 million, down 11% from $205.7 million last year. Consolidated segment profit was $54.6 million, down 12% from $62.2 million last year. Net income attributable to shareholders for the quarter was $5.9 million ($0.07 basic and diluted per share), compared to $31.6 million ($0.38 basic and diluted per share) last year. Net income for the current quarter includes a pre tax charge for debt refinancing of $25.0 million. Removing the impact of this item results in adjusted net income attributable to shareholders of $24.4 million ($0.29 per share) in the current quarter.
Consolidated revenues for the six months ended February 28, 2013 were $409.8 million, down 7% from $442.6 million last year. Consolidated segment profit was $147.3 million, down 4% from $153.5 million last year. Net income attributable to shareholders for the six months was $58.1 million ($0.70 basic and $0.69 diluted per share), compared to $82.1 million ($0.99 basic and diluted per share) last year. Removing the impact of the debt refinancing costs results in adjusted net income attributable to shareholders of $76.6 million ($0.92 per share)in the current year.
Operational Results ‐ Highlights
• Movie Centralfinished the quarter with 1,013,000 subscribers, up 37,000 year‐to‐date
• Segment profitmargin of 41% year‐to‐date
• Segmentrevenues decreased 12% inQ2 2013 and 9% year‐to‐date
• Segment profit(1) decreased 14% in Q2 2013 and 7% year‐to‐date
• Segment profitmargin of 31% year‐to‐date
• Segmentrevenues decreased 5% inQ2 2013 and 2% year‐to‐date
• Segment profit(1) decreased 2% inQ2 2013, butincreased 9% year‐to‐date
• Issued $550.0 million of 4.25% Senior Unsecured Guaranteed Notes due in 2020
• Agreements completed, subsequent to the quarter, to extend Radio presence into Ottawa, consolidate ownership of TELETOON and ABC Spark, acquire 100% of Historia and Séries+, and divest Corus’ minority interestin the Food Network (Canada)
(1)See definitions and discussion under Key Performance Indicators in MD&A.
Corus Entertainment Inc. reports in Canadian dollars.
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