TVA GROUP REPORTS $5.7 MILLION NET LOSS ATTRIBUTABLE TO SHAREHOLDERS IN THE SECOND QUARTER OF 2016
Montreal, Canada - TVA Group Inc. (the "Corporation") today announced that it recorded a net loss attributable to shareholders of $5.7 million, or a loss of $0.13 per share, in the second quarter of 2016, compared with a loss of $2.6 million, or a loss of $0.06 per share, in the same quarter of 2015.
Second quarter operating highlights:
- Consolidated adjusted operating income of $2,427,000, an unfavourable variance of $4,944,000 (-67%) from the same quarter of 2015;
- $2,431,000 adjusted operating loss1 in the Broadcasting & Production segment, a $3,298,000 negative variance due primarily to a 20% increase in the adjusted operating loss1 of “TVA Sports” because of lower advertising sales resulting from the failure of the Montreal Canadiens and other Canadian teams in the National Hockey League (“NHL”) for the Stanley Cup playoffs;
- $3,920,000 adjusted operating income1 in the Magazines segment, up $2,701,000 (222%) mainly because of the addition for part of the quarter of the adjusted operating results generated by the magazines acquired from Transcontinental, the operational synergies realized since the integration of the acquired magazines, and other cost-cutting initiatives;
- $938,000 adjusted operating income1 in the Film Production & Audiovisual Services segment (“MELS”), a negative variance of $4,347,000 (-82%) due to lower volume of activities in soundstage and equipment rental and in visual effects. In the same quarter of 2015, our soundstages and production equipment were heavily used for the major US production X‑Men Apocalypse.
“Our quarterly results were impacted by the decline in the TVA Sports channel’s advertising sales, due in large part to the fact that the Montreal Canadiens didn’t make the NHL playoffs. Apart from that unusual circumstance, we are satisfied with the performance of the other units of our Broadcasting & Production segment, particularly TVA Network, which grew its adjusted operating income by 2.2% and increased its market share to 23.4%, up 1.4 percentage points from the same period of 2015. TVA Network carried 4 of the top 5 most-watched programs in Quebec, including La Voix, which was the Number one show again with more than 2.7 million viewers”, commented Julie Tremblay, President and Chief Executive Officer of the Corporation.
“The increase in the Magazines segment’s operating results was the result of a concerted effort to successfully integrate the magazines acquired from Transcontinental on April 12, 2015. Our editorial and content management teams are constantly improving the content of our brands and magazines in order to address our readers’ ever-changing needs. The latest Vividata surveys show that we have grown our print readership by 2% and maintained our leading position in Canada’s magazine publishing industry with nearly 9 million readers across all platforms”, said Ms Tremblay.
“Finally, the Film Production & Audiovisual Services segment suffered from the absence of any major Hollywood production in the second quarter of 2016, whereas the movie X-Men Apocalypse was filming on our soundstages in the same period of 2015. However, we are pleased with the bookings we have for next months,” concluded Julie Tremblay.
Adjusted operating income (loss)
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 costs, impairment of assets and others, income taxes and share of loss (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.
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. Factors that may cause actual results to differ from current expectations include seasonality, operational risks (including pricing actions by competitors and risks related to the 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, 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, 2015 and the “Risk Factors” section in the Corporation’s 2015 annual information form.
The forward-looking statements in this news release reflect the Corporation’s expectations as of August 1st, 2016 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 by the applicable securities laws.
TVA Group Inc., a subsidiary of Quebecor Media Inc., is an integrated communications company engaged in the broadcasting, film and audiovisual production, and magazine publishing industries. TVA Group Inc. is the largest broadcaster of French-language entertainment, information and public affairs programming, in North America, and one of the largest private production companies. TVA Group is also a leading publisher of French-language magazines and publishes some of Canada’s most popular English-language titles. The Corporation’s Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.