WINNIPEG, Jan. 10 /PRNewswire-FirstCall/ -- CanWest Global
Communications Corp. today reported financial results for the three
months ended November 30, 2006, the first quarter of its 2007
fiscal year. Consolidated net earnings were $66 million or $0.37
per share for the quarter compared to consolidated net earnings of
$30 million or $0.17 per share for the first quarter of fiscal
2006. The Company's consolidated revenues for the quarter increased
by 1% to $860 million compared to consolidated revenues of $848
million for the same period in the prior year. Consolidated
EBITDA(1) declined by 3% to $227 million for the quarter compared
to $233 million for the first quarter of fiscal 2006. Commenting on
the results, Leonard Asper, CanWest's President and Chief Executive
Officer, said, "We are satisfied with our first quarter results
particularly with the significant improvement in Canadian
television. Our programming strategy is working, increasing the
number of top 10 and top 20 shows, and is recognized by our
advertisers. Cost containment initiatives in our newspaper and
interactive operations plus strong online revenue contributed to
the 8% improvement in EBITDA for those operations. We also see the
beginning of a positive turnaround at Network TEN and a strong
market in New Zealand. In sum, this is an encouraging start to the
new fiscal year and we expect this positive trend to continue as we
get further into fiscal 2007." Revenues and EBITDA for the
publications and interactive operations continued to demonstrate
growth, with revenues of $344 million up 1% compared to the first
quarter last year, and EBITDA of $88 million for the quarter,
representing an 8% gain compared to the same quarter last year.
Canadian television operations registered significant improvement
over last year's result with revenues up 11% for the quarter to
$208 million and EBITDA of $38 million up 30% over last year's
first quarter result, in highly competitive market conditions. A
higher exchange rate for the Canadian dollar as well as challenging
advertising markets continued to affect results in Australia
compared to one year ago although the trend line has improved
compared to earlier quarters. At Network TEN although ratings
continued to be very strong, revenues decreased by 3% from last
year in local currency terms, a significant improvement from the
revenue declines of the previous four quarters. In Canadian
currency, revenues of $216 million for the quarter were down by 6%
from the first quarter of fiscal 2006. A 17% decline in EBITDA at
TEN was attributable to higher investment in programming to sustain
TEN's ratings leadership in its target 16-49 year old audience. Eye
Corp reported revenues of $36 million for the quarter, 20% higher
than for the first quarter last year. EBITDA of $5 million for the
quarter was down by 33% compared to the prior year, due entirely to
expenditures associated with the substantial international
expansion of Eye Corp into the US and UK markets which should pay
off in higher future earnings. CanWest's New Zealand broadcasting
operations registered a 2% increase in revenues for the quarter in
local currency terms. However as a result of currency translation,
first quarter revenues of revenues of $56 million and EBITDA of $18
million reflected declines of 7% and 6% respectively, from last
year's result. Highlights of the first quarter include the
following: - CanWest's distributions from the CanWest MediaWorks
Income Fund totaled $36.6 million for the first quarter. - The TEN
Group declared distributions which resulted in CanWest receiving
interim dividends and interest on its subordinated debentures in
the aggregate amount of A$47.8 million (approximately C$43 million)
in late December 2006. - In October, the Company entered into an
agreement for the sale of its two Canadian radio stations to Corus
Entertainment Inc. for a cash price of $15 million. The transaction
is subject to the buyer obtaining all necessary regulatory
approvals. - Global Television placed three shows in the top ten
and nine in the top 20 in the Fall season in the extended Toronto
market. House, Survivor and Prison Break retained their solid grip
on audiences placing 2nd, 4th and 7th respectively in the Toronto
market in the first quarter. Entertainment Tonight Canada
strengthened its position as the number one Canadian entertainment
magazine program while Global National remained Canada's number one
national news program with consistently more viewers than its CTV
and CBC rivals. - Specialty television subscribers of CanWest's
services climbed to 10.7 million as TVtropolis and Global's seven
Digital channels continued to benefit from the growth in the size
of the digital cable and satellite markets. - The recent decision
overturning CRTC Part II fees on airtime we expect will reduce
revenue related expenses at Canadian television by approximately
$6-$7 million annually. - CanWest Interactive's network of online
sites attracted more than 5.2 million unique visitors in the month
of November, the highest ever. Spurred on by the launch of
streaming network shows and the call for auditions for the Canadian
taping of Deal or No Deal, the canada.com and globaltv.com stable
of online sites lead Canadian news and information sites attracting
23% of Canadians online. - Eye Corp, our Australian out-of-home
advertising company, completed a major strategic move into the
United States market. By December 2006 Eye Corp controlled over
3,800 internal and external, static and scrolling displays in a
network of almost 300 shopping malls across the United States and
has become one of the largest players in mall advertising in the
United States. - In anticipation of the enactment early in 2007 of
new legislation that will relax Australian restrictions on media
ownership, the Company retained Citigroup Global Markets in October
to review strategic options that may be available to CanWest. The
review remains an ongoing process and the Company has not, at this
time, made any decision with respect to our South Pacific strategy
going forward. - Earlier today, the Company announced that it, in
conjunction with private equity firm, Goldman Sachs Capital
Partners, has entered into exclusive discussions with Alliance
Atlantis Communications Inc. and its controlling shareholder,
Southhill Strategy Inc., regarding the possible purchase of
Alliance Atlantis Communications Inc. There can be no assurance
that these discussions will result in a definitive agreement.
Outlook: With sustained high audience ratings and a firming of
advertising markets, the Company's South Pacific operations are
well-positioned to show continued improvement as the year
progresses. The positive year-over-year earnings trend of the
Publishing and Interactive Group should continue in fiscal 2007 as
cost containment combines with modest revenue growth to sustain and
improve margins. Canadian television operations are also expected
to continue to improve. We are hopeful that regulatory relief,
arising out of the CRTC television review, will eventually also
contribute to improved results at Global. Debt reduction in the
quarter from the application of proceeds from the sale of TV3
Ireland has further reduced annual interest expense, while
augmenting the financial strength and flexibility of the Company.
Forward-Looking Statements: This news release contains certain
comments or forward-looking statements about the objectives,
strategies, financial conditions, results of operations and
businesses of CanWest. Statements that are not historical facts are
forward-looking and are subject to important risks, uncertainties
and assumptions. These statements are based on our current
expectations about our business and the markets in which we
operate, and upon various estimates and assumptions. The results or
events predicted in these forward-looking statements may differ
materially from actual results or events if known or unknown risks,
trends or uncertainties affect our business, or if our estimates or
assumptions turn out to be inaccurate. As a result, there is no
assurance that the circumstances described in any forward-looking
statement will materialize. Significant and reasonably foreseeable
factors that could cause our results to differ materially from our
current expectations are discussed in the section entitled "Risk
Factors" contained in our Annual Information Form for the year
ended August 31, 2006 dated November 28, 2006 filed by CanWest
Global Communications Corp. with the Canadian securities
commissions (available on SEDAR at http://www.sedar.com/ ) and with
the U.S. Securities and Exchange Commission under Form 40-F
(available on EDGAR at http://www.sec.gov/), (as updated in our
most recent Management's Discussion and Analysis for the three
months ended November 30, 2006, dated January 10, 2007). We
disclaim any intention or obligation to update any forward-looking
statement even if new information becomes available, as a result of
future events or for any other reason. The Company's financial
statements are available on the Company's website:
http://www.canwestglobal.com/. The Company will hold its regular
quarterly conference call with analysts on January 10, 2007 at 5:00
p.m. Eastern Standard Time. The call-in numbers are 416-644-3414 or
800-733-7571. Replays are also available for five days following
the call at 416-640-1917 or 877-289-8525, access code - 21211048
followed by the number sign. CanWest Global Communications Corp.
(http://www.canwestglobal.com/), (TSX: CGS and CGS.A, NYSE: CWG) an
international media company, is Canada's largest media company. In
addition to owning the Global Television Network, CanWest also
owns, operates and/or holds substantial interests in Canada's
largest publisher of daily newspapers, and conventional television,
out-of-home advertising, specialty cable channels, web sites and
radio stations and networks in Canada, New Zealand, Australia,
Turkey, Singapore, Indonesia, Malaysia, the United Kingdom and the
United States. (1) EBITDA is defined as earnings before interest,
income taxes, depreciation, amortization, interest rate and foreign
currency swap losses, foreign exchange gains (losses), investment
gains, losses and write-downs, loss on debt extinguishment,
minority interests, interest in earnings of equity accounted
affiliates, realized currency translation adjustments and earnings
(loss) from discontinued operations. This supplementary earnings
measure does not have a standardized meaning prescribed by Canadian
generally accepted accounting principles and may not be comparable
to similar measures presented by other companies nor should it be
viewed as an alternative to net earnings. The reconciliation of
EBITDA to net earnings is evident on the face of the following
consolidated statements of earnings. CANWEST GLOBAL COMMUNICATIONS
CORP. BUSINESS SEGMENT INFORMATION (unaudited) (in thousands of
Canadian dollars) For the three months ended
-------------------------- November 30, ------------ 2006 2005
REVENUE Publications and Interactive - Canada 343,867 341,298
----------- ----------- Television Canada 207,896 186,794 Australia
215,860 230,696 New Zealand 33,919 36,100 ----------- -----------
457,675 453,590 Radio New Zealand 21,660 23,572 Turkey 3,385 -
United Kingdom 234 - ----------- ----------- 25,279 23,572 Outdoor
- Australia 35,528 29,674 Intersegment revenues (1,913) (338)
----------- ----------- CONSOLIDATED REVENUE 860,436 847,796
----------- ----------- ----------- ----------- SEGMENT OPERATING
PROFIT Publications and Interactive - Canada 87,754 81,624
----------- ----------- Television Canada 37,681 29,081 Australia
86,697 104,490 New Zealand 12,122 12,275 ----------- -----------
136,500 145,846 Radio New Zealand 6,030 7,018 Turkey 1,190 - United
Kingdom (823) - ----------- ----------- 6,397 7,018 Outdoor -
Australia 5,026 7,469 ----------- ----------- 235,677 241,957
Corporate and other (9,025) (8,657) ----------- -----------
OPERATING PROFIT (EBITDA)(1) 226,652 233,300 -----------
----------- ----------- ----------- (1) EBITDA is defined as
earnings before interest, income taxes, depreciation, amortization,
interest rate and foreign currency swap losses, foreign exchange
gains (losses), investment gains, losses and write-downs, loss on
debt extinguishment, minority interests, interest in earnings of
equity accounted affiliates, realized currency translation
adjustments and earnings (loss) from discontinued operations. This
supplementary earnings measure does not have a standardized meaning
prescribed by Canadian generally accepted accounting principles and
may not be comparable to similar measures presented by other
companies nor should it be viewed as an alternative to net
earnings. The reconciliation of EBITDA to net earnings is evident
on the face of the following consolidated statements of earnings.
CANWEST GLOBAL COMMUNICATIONS CORP. CONSOLIDATED STATEMENTS OF
EARNINGS (UNAUDITED) (In thousands of Canadian dollars except as
otherwise noted) For the three months ended
-------------------------- November 30, November 30, 2006 2005
Revenue 860,436 847,796 Operating expenses 419,461 406,729 Selling,
general and administrative expenses 214,323 207,767 -----------
----------- 226,652 233,300 Amortization of intangibles 1,401 5,575
Amortization of property, plant and equipment 23,859 23,532 Other
amortization 571 1,454 ----------- ----------- Operating income
200,821 202,739 Interest expense (44,757) (52,510) Interest income
1,609 515 Amortization of deferred financing costs (2,411) (1,949)
Interest rate and foreign currency swap losses 8,779 (120,539)
Foreign exchange gains (losses) 2,877 (574) Investment gains,
losses and write-downs 10 101,218 Loss on debt extinguishment -
(116,589) ----------- ----------- 166,928 12,311 Provision for
(recovery of) income taxes 57,729 (54,826) ----------- -----------
Earnings before the following 109,199 67,137 Minority interests
(43,876) (43,715) Interest in earnings of equity accounted
affiliates 363 830 Realized currency translation adjustments (425)
(116) ----------- ----------- Net earnings from continuing
operations 65,261 24,136 Earnings from discontinued operations
1,102 5,769 ----------- ----------- Net earnings for the period
66,363 29,905 ----------- ----------- ----------- -----------
Earnings per share from continuing operations: Basic $0.37 $0.14
Diluted $0.37 $0.14 Earnings per share: Basic $0.37 $0.17 Diluted
$0.37 $0.17 DATASOURCE: CanWest Global Communications Corp.
CONTACT: John Maguire, Chief Financial Officer, Tel: (204)
956-2025, Fax: (204) 947-9841,
Copyright