Montreal, Canada – TVA Group Inc. (“TVA Group” or the “Corporation”) announced today that it recorded operating revenues in the amount of $144.5 million for the first quarter of 2022, a year-over-year increase of $3.7 million. Net loss attributable to shareholders was $13.0 million or $0.30 per share, compared with net loss attributable to shareholders of $4.5 million or $0.10 per share for the same quarter of 2021.
First quarter operating highlights:
- $9,721,000 in consolidated negative adjusted EBITDA , an $11,857,000 unfavourable variance from the same quarter of 2021.
- $15,468,000 in negative adjusted EBITDA1 in the Broadcasting segment, an $11,886,000 unfavourable variance mainly due to a decrease in profitability at TVA Network, which increased its investments in content, and to the decrease in Qolab’s adjusted EBITDA1 due to lower volume of activities. The variances were partially offset by increased profitability at “TVA Sports,” which had to absorb significant content costs in the first quarter of 2021 as a result of the change in the broadcast schedule for the National Hockey League 2020-2021 season.
- $3,844,000 in adjusted EBITDA1 in the Film Production & Audiovisual Services (“MELS”) segment, a $216,000 favourable variance stemming primarily from an increase in profitability of soundstage, mobile and equipment rental services and virtual production services, whereas the segment’s other activities recorded decreased profitability.
- $440,000 in adjusted EBITDA1 in the Magazines segment, a $1,323,000 unfavourable variance due mainly to reduced government assistance and lower newsstand revenues, which were not entirely offset by cost-reduction measures and savings in operating expenses.
- $1,553,000 in adjusted EBITDA1 in the Production & Distribution segment, a $1,261,000 favourable variance generated primarily by Canadian and international distribution of films produced by Incendo.
First quarter results were largely affected by the reduced profitability of TVA Network due to a significant increase in our content investments. With our variety shows and series, our strong prime time schedule allowed us to grow our market share by 0.7 points, as we broadcast four of the five most-watched shows in Quebec, including the new original series Le bonheur and the variety show Star Académie, which stood out with average audiences of more than 1.5 million viewers. It is becoming critical to invest more heavily in our programming to ensure that TVA Network maintains its leadership position amid the intensified competition and the increase in available content. On the strength of this strategy, despite a declining traditional advertising market compared with 2021, TVA Network grew its advertising revenues by 2.3% during the quarter, a level of growth fuelled by our digital platforms, particularly TVA+.
Our specialty channels’ advertising revenues also increased 11.3%, mainly due to “LCN,” which has provided exceptional coverage of the current geopolitical situation, as well as “TVA Sports.” More than ever, content is the key to our strategies and our viewers and advertisers alike reap the benefits,” said Pierre Karl Péladeau, acting President and CEO of TVA Group.
“In the Film Production & Audiovisual Services segment, our soundstage and equipment rental services reported increased activity. In addition to our desirability for various local productions, we continue to be a destination of choice for international players, including Disney, which rented part of our studios for the first quarter of the year. Our financial performance continues to be dependent on the presence of major productions in our facilities. Indeed, enhancement of our service offering through the addition of MELS 4 is designed to position us well in that regard. Our virtual production activities, which are up over the 2021 reference quarter, continue to stand out and attract growing numbers of producers with a superior business case,” continued Mr. Péladeau.
“In the Magazines segment, first quarter results were significantly impacted by the reduced government assistance and a 9.5% decrease in newsstand revenues, which are a major source of revenues for our entertainment titles. In that context, we reiterate the importance for the federal government to commit to maintaining the current grant programs to support this segment, which has been in decline for a number of years. As a leading publisher in the French-language market, we produce titles that help showcase our talent and local culture and it is essential to ensure their survival.
“Our Production & Distribution segment, for its part, achieved solid performance for the first quarter of the year. Our increased distribution activities during the period enabled us to deliver over 20 films produced by Incendo in the past two years. To continue to develop this segment, we recently announced the establishment of a brand new distribution unit for Incendo and Quebecor Content, under the direction of Cynthia Kennedy. With over 25 years of experience in sales and management positions with international media companies, we are confident Ms. Kennedy has the expertise and leadership to accelerate our growth in this segment,” concluded Mr. Péladeau.
Since March 2020, the COVID-19 pandemic has at times affected the quarterly results of the Corporation's various segments. Given the uncertainty about the future evolution of the pandemic, including any major new wave, the full future impact of the public health crisis on operating results cannot be determined with certainty.
In its analysis of operating results, the Corporation defines adjusted EBITDA as net income (loss) before depreciation and amortization, financial expenses, operational restructuring costs and other, income taxes expense (recovery) and share of income of associates. Adjusted EBITDA as defined above is not a measure of results that is consistent with International Financial Reporting Standards (“IFRS”). It is not intended to be regarded as an alternative to other financial operating 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 EBITDA is also relevant because it is a significant component of the Corporation’s annual incentive compensation programs. The Corporation’s definition of adjusted EBITDA 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. 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 and Production & Distribution segments), 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, labour relation risks, and the risks related to public health emergencies, including COVID-19, as well as any emergency measures implemented by government.
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 www.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, 2021 and the “Risk Factors” section in the Corporation’s 2021 annual information form.
The forward-looking statements in this news release reflect the Corporation’s expectations as of May 9, 2022, 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 production and audiovisual services, international production and distribution of television content, 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.
The condensed consolidated Financial Statements, with notes, and the interim Management’s Discussion and Analysis for the three-month period ended March 31, 2022, can be consulted on the Corporation’s website at www.groupetva.ca.