TORONTO — A C$21 million ($15 million) restructuring charge, including a $5 million cut at its production division Fireworks Entertainment, took a bite out of CanWest Global Communications’ fiscals this quarter.
Net earnings for the third quarter ended May 31, released Thursday, were $8.6 million, compared to $22.2 million a year ago. The figure includes $15 million in restructuring, primarily in the Winnipeg-based media company’s publishing operations and Fireworks Entertainment. Excluding one-time items, net earnings would have been $23.6 million.
Combined revenues in the quarter were $492.6 million, a 6% increase from $464 million the company posted for the third quarter of 2002.
Ad revenues were strong and its international division, which includes Australia’s Network TEN and TV3 and TV4 in New Zealand, reported healthy growth. TV revenues in Canada were hit by the war in Iraq, which scuttled some ad sales, and NHL playoffs, in which two Canadian teams progressed to later rounds. Pubcaster CBC holds rights to the playoffs.
Global TV had four of the top ten shows in Toronto and three in Vancouver, however, including “Survivor VI,” “Friends,” “Will and Grace” and “The Simpsons.”
Fireworks founder Jay Firestone ankled the company in May. However, CanWest prexy and CEO Leonard Asper denied that it is being wound down, despite announcing further cuts to come in the division.
He said CanWest bought Fireworks six years ago as a vehicle to own, produce and control programming “so we’re not as dependent on the Foxes and the Paramounts and the Warner Brothers of this world” — and that remains unchanged.
However, he added, because of the weak international market, Fireworks will work more closely with the Global Television Network rather than depending on international distribution. The company will look to the international market, primarily the U.S., for co-production financing.