Canada's Astral Media sees Q1 profits up 42%

As ad spend revival spurs Canuck broadcaster earnings

TORONTO -- An improving TV ad market helped Canadian broadcaster Astral Media on Thursday post higher first quarter profits.

Montreal-based Astral, which operates radio stations, pay TV and cable channels, saw earnings jump 42% to CAN64.6 million ($62.6 million) for the three months to Nov. 30, against a profit of CAN$39.6 million in 2008.

Revenue edged 3% higher to CAN$250.6 million ($243.2 million), against a year-earlier CAN$244.5 million.

On the TV side, where Astral has just launched HBO Canada, revenue rose 6% to CAN$141.2 million ($137 million), against CAN$133 million in 2008, as ad revenue rose 1% and subscriber fee revenue increased 8%.

On the radio side, revenue fell 1% to CAN$89.2 million ($83.4 million), from a year-earlier CAN$89.8 million.

Signs of a Canadian ad spend revival were also seen Wednesday when Corus Entertainment also posted higher first quarter earnings.

The Canadian broadcast reporting season also saw rival Canwest Global Communications Corp. post a first quarter profit on the sale of its stake in Ten Network Holdings in Australia.

But unlike Astral and Corus, which buoyed themselves during the economic downtown with pay TV and cable subscriber fees, Canwest Global has seen its broadcast and publishing divisions hit hard by a recent ad slump.

So Winnipeg, Manitoba-based Canwest Global's rare profit came as it continues to sell assets to stay afloat through a court-directed restructuring.

Canwest Global said it earned CAN$652.5 million ($633.5 million), compared to a year-earlier loss of CAN$36.9 million, after it posted a CAN$570 million gain from selling its Ten Network Holdings stake in 2009.

First quarter revenue was CAN$570.7 million ($553.4 million), against a year-earlier CAN$634.3 million.

"After bumping along the bottom of the recession these results demonstrate we have been able to make the adjustments needed to take advantage of the improving Canadian economy," Canwest Global Leonard Asper told company employees in an internal memo Wednesday.

More change is coming for Canwest Global, which tipped itself into creditor protection in October and last week put its publishing division up for sale.

Asper said the media group would continue to close or sell unprofitable divisions and cut operating costs.

During the latest quarter, Canwest Global's broadcast division, which includes the Global Television network and 13 specialty channels co-owned by Goldman Sachs, revenue fell 5% to $285 million ($277 million), while operating profit increased 56% to CAN$109 million ($105.8 million).

CanWest's newspaper and related online division similarly saw revenue fall 14% to CAN$286 million ($277.6 million) amid an industry-wide print ad slump, while its operating profit increased 5% to CAN$70 million ($68 million).