EDITOR’S NOTE: This copy has been updated to show that dividends will be payed in December, not September.
Corus Entertainment Inc. slashed its dividend and announced a $1-billion-writedown in the value of its broadcast licences Wednesday as the company outlined its plans to combat the challenges facing the Canadian media sector.
Canada’s second-largest broadcaster, Corus reported a loss on paper of $935.9 million in its latest quarter, compared to a profit of $66.7 million a year ago. The loss was entirely due to a one-time, $1.01-billion non-cash impairment charge, which reflects a significant reduction in the perceived value of the company’s Canadian broadcast licences as both audiences and advertisers shift to U.S.-based online and streaming platforms.
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Corus says it will pay a quarterly dividend of 6 cents per class-B share starting in December, compared with its current dividend which is a monthly payment to shareholders of 9.5 cents per class-B share. All of the proceeds from the dividend reduction will be directed toward repayment of the company’s debt, which rose to more than $2 billion as a result of the company’s acquisition of Shaw Media two years ago.
Revenue in what was the company’s third quarter totalled $441.4 million, down from $461.6 million in the same quarter last year.
On an adjusted basis, which excludes the impairment charge and other one-time items, Corus says it earned $78.1 million or 37 cents per share for the quarter compared with an adjusted profit of $70.1 million, or 35 cents per share, a year ago. Analysts on average had expected a profit of 36 cents per share, according to Thomson Reuters Eikon.
Corus owns radio stations as well as conventional and specialty television services across the country including Global Television and Global News. It also operates the children’s animation studio Nelvana and is the largest publisher of children’s books in Canada through Kids Can Press.
— With files from The Canadian Press.
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