Ten takes hit as Canwest looks to sell stake

Australian network's revenue fell 15% in third quarter

TORONTO -- As Canwest Global Communications looks to possibly sell its Ten Network stake, the Canadian broadcaster said Wednesday that third-quarter earnings and revenue at its Australian operations took a hit from the advertising slump.

Winnipeg-based Canwest Global, which has a 57% stake in Sydney-based parent Ten Network Holdings, said the Australian network's revenue fell 15% to AUS$174.1 million ($139.5 million) for the three months to May 31, against a year-earlier AUS$206.7 million.

Third-quarter EBITIDA was down 76% to AUS$9.1 million ($7.2 million), against AUS$38.2 million in 2008.

The Ten Network ad revenue slide comes as Canwest Global eyes a possible sale of its controlling stake in the Australian broadcaster to reduce its own debt load and restructure its balance sheet.

"The continued negative impact of this challenging and difficult advertising market was the key factor on our third quarter revenue being 15% below the prior corresponding period," Ten Holdings' executive chairman Nick Falloon said in a statement.

Falloon predicted full-year TV costs will be down on 2008 figures, and added his network remained focused on cash flow management and debt reduction.

He added Ten Network will not breach its banking covenants at it looks to reduce a debt load projected to be around AUS$600 million ($482 million) at the end of fiscal 2009 to Aug. 31.