Montreal, Canada – TVA Group Inc. (“TVA Group” or the “Corporation”) announced today that it recorded a net loss attributable to shareholders in the amount of $5.0 million or a loss of $0.12 per share in the first quarter of 2018, compared with a net loss attributable to shareholders of $8.0 million or a loss of $0.19 per share in the same quarter of 2017.
First quarter operating highlights:
- Consolidated adjusted operating income of $2,293,000 representing a favourable variance of $2,887,000 from the same quarter of 2017.
- $2,406,000 adjusted operating income1 in the Broadcasting & Production segment representing a favourable variance of $1,749,000 mainly because of a 67.6% decrease in the “TVA Sports” channel’s adjusted operating loss1 and a 5.0% increase in the adjusted operating income1 of the other specialty services, despite a decrease in TVA Network’s adjusted operating income.1
- $875,000 adjusted operating income1 in the Magazines segment, a favourable variance of $491,000 primarily as a result of savings generated by various staff and expense rationalization plans implemented in 2017 and the first quarter of 2018.
- $988,000 adjusted operating loss1 in the Film Production & Audiovisual Services segment (”MELS”) representing a favourable variance of $647,000 essentially because of a decrease in the adjusted operating loss1 of soundstage, mobile unit and production equipment rental services.
“We are satisfied with our results for the first quarter of fiscal year 2018. The Broadcasting & Production segment’s financial results were up slightly because of improved results at “TVA Sports” and our other specialty channels as a whole. We are pleased to announce that “TVA Sports” will be the French‑language broadcaster of the Euro 2020 soccer tournament, further enriching the quality and diversity of our sports programming, which addresses the full breadth of Quebecers’ interests.
Our just‑announced agreement to acquire the “Évasion” and “Zeste” specialty channels is consistent with our strategy of growing and diversifying our revenue streams. We are very enthusiastic about adding these two channels, subject to CRTC approval, and expanding our content offerings.
TVA Network’s market share held steady at 24.1% despite the PyeongChang 2018 Winter Olympics aired on Radio‑Canada. “Prise 2” posted very strong growth with a 1.0 percentage point jump in its market share while “LCN” was up 0.2 points to 4.4%2 compared with 2.5%2 for its main rival, RDI,” commented France Lauzière, President and CEO of TVA Group.
“Although the decline in our Magazines segment’s operating revenues continued in the first quarter of 2018, we were able to improve the segment’s financial results by continuing our efforts to cut operating expenses and focusing on our strongest brands. According to the latest Vividata survey, we are reaching 9.1 million readers in Canada across all platforms. Our English‑language titles have 6.7 million readers and our French‑language titles 2.9 million”, added Ms Lauzière.
“Lastly, the Film Production & Audiovisual Services segment posted a year‑over‑year improvement in financial results for the fourth consecutive quarter as a result of increased adoption of our services by local and international producers. During the quarter, we added mobile unit rental and related technical expertise to our services with the acquisition of the assets of Mobilimage inc. We are also very proud of the two prizes won by MELS’ professionals at the Canadian Screen Awards – for Achievement in Visual Effects and Achievement in Overall Sound – and their six nominations for the 2018 Gala Québec Cinéma,” concluded Ms. Lauzière.
Adjusted operating income (loss) (“Adjusted operating results”)
In its analysis of operating results, the Corporation defines adjusted operating income (loss) as net income (loss) before depreciation of property, plant and equipment, amortization of intangible assets, financial expenses, operational restructuring and others, income taxes and share of income of associated corporations. Adjusted operating income (loss) as defined above is not a measure of results that is consistent with International Financial Reporting Standards (“IFRS”). Neither is it intended to be regarded as an alternative to other financial performance measures or to the statement of cash flows as a measure of liquidity. This measure should not be considered in isolation or as a substitute for other performance measures prepared in accordance with IFRS. This measure is used by management and the Board of Directors to evaluate the Corporation’s consolidated results and the results of its segments. This measure eliminates the significant level of impairment, depreciation and amortization of tangible and intangible assets and is unaffected by the capital structure or investment activities of the Corporation and its segments. Adjusted operating income (loss) is also relevant because it is a significant component of the Corporation’s annual incentive compensation programs. The Corporation’s definition of adjusted operating income (loss) may not be identical to similarly titled measures reported by other companies.
Conference call for investors
TVA Group will hold a conference call to discuss its first quarter 2018 results on May 3, 2018, at 2:00 p.m. EST. There will be a question period reserved for financial analysts. To access the call, please dial 1‑877‑293‑8052, access code for participants 66581#. A tape recording of the call will be available from May 3 to June 3, 2018 by dialling 1‑877‑293‑8133, conference number 1230739#, access code for participants 66581#.
Forward‑looking information disclaimer
The statements in this news release that are not historical facts may be forward‑looking statements and are subject to important known and unknown risks, uncertainties and assumptions which could cause the Corporation’s actual results for future periods to differ materially from those set forth in the forward‑looking statements. Forward‑looking statements generally can be identified by the use of the conditional, the use of forward‑looking terminology such as “propose,” “will,” “expect,” “may,” “anticipate,” “intend,” “estimate,” “plan,” “foresee,” “believe” or the negative of these terms or variations of them or similar terminology. Certain factors that may cause actual results to differ from current expectations include seasonality, operational risks (including pricing actions by competitors and the risk of loss of key customers in the Film Production & Audiovisual Services segment), programming, content and production cost risks, credit risk, government regulation risks, government assistance risks, changes in economic conditions, fragmentation of the media landscape, risk related to the Corporation’s ability to adapt to fast‑paced technological change and to new delivery and storage methods, and labour relation risks.
Investors and others are cautioned that the foregoing list of factors that may affect future results is not exhaustive and that undue reliance should not be placed on any forward‑looking statements. For more information on the risks, uncertainties and assumptions that could cause the Corporation’s actual results to differ from current expectations, please refer to the Corporation’s public filings, available at www.sedar.com and http://groupetva.ca, including in particular the “Risks and Uncertainties” section of the Corporation’s annual Management’s Discussion and Analysis for the year ended December 31, 2017 and the “Risk Factors” section in the Corporation’s 2017 annual information form.
The forward‑looking statements in this news release reflect the Corporation’s expectations as of May 3, 2018 and are subject to change after this date. The Corporation expressly disclaims any obligation or intention to update or revise any forward‑looking statements, whether as a result of new information, future events or otherwise, unless required to do so by the applicable securities laws.
TVA Group Inc., a subsidiary of Quebecor Media Inc., is a communications company engaged in the broadcasting, film and audiovisual production, and magazine publishing industries. TVA Group Inc. is North America’s largest broadcaster of French‑language entertainment, information and public affairs programming and one of the largest private‑sector producers of French‑language content. It is also the largest publisher of French‑language magazines and publishes some of the most popular English‑language titles in Canada. The Corporation’s Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.
Denis Rozon, CPA, CA
Vice President and Chief Financial Officer