Earnings dip due to costs, higher interest charges
MONTREAL — Corus Entertainment, one of Canada’s leading specialty TV owners and producers, reported strong revenue and cash flow gains for the fourth quarter and past year. But it posted weaker net earnings.
Net income was down as the Toronto-based company incurred major costs and higher interest charges as a result of recent acquisitions.
Corus owns specialty channels YTV, Treehouse TV, Movie Central, Viewer’s Choice and 80% of CMT.
Corus posted a 106% increase in revenue for the fourth quarter, ended Aug. 31 to $168 million ($106 million) from $51 million a year earlier. Company also saw cash flow increase 54% to $22 million. Net income dipped to $507,000, compared with $10 million in the same period last year.
Revenue for the year increased 143% to $353 million. Cash flow for the year increased 97% to $82 million. Net earnings were $84 million, down from $99 million.
Charges related to Corus’ recent acquisitions proved the biggest drag on earnings. Last November, Corus acquired 100% of animation producer Nelvana for $342 million; in February, company acquired six radio stations from Montreal-based Metromedia CMR Broadcasting for $117 million; and in March it picked up the Women’s Television Network for $132 million.
Nelvana delivered strong results for Corus, with the Toronto-based animation producer upping its annual delivery of episodes from 199 to 242.
Nelvana’s revenue for the fourth quarter was $35 million, up 69% from a year earlier; year-end revenue was $87 million. The production revenue rise is a direct result of an increase in the number of proprietary episodes in the quarter, from 26 to 63.
Revenue per episode also increased in the quarter from $146,000 to $187,000.