Corus Entertainment’s Q4 and 2020 year end results reveal that Corus Radio segment revenues dipped 43% in the fourth quarter and 28% for the year, while segment profit fell $5.7 million (83%) in Q4 and $18.6 million (54%) for the year, as discretionary ad spending dried up.
On the Television side, advertising losses were mitigated by demand for content from U.S. broadcasters and streaming services, with segment revenues down 13% in Q4 and 9% for the year. TV advertising revenues decreased 25% in the quarter and 15% for the year, while subscriber revenues dipped by 1% for both the quarter and year. Merchandising, distribution and other revenues were up 15% in both Q4 and for the year, with segment profit losses dipping 9% in Q4 and 11% for the year.
Corus noted that the same production disruption that buoyed demand for its television content, also led to lower programming costs for its own channels with fewer new episodes and more repeats. However, the company said COVID-19 is expected to increase production costs in the immediate future.
“Scarcity of producers, cast, crew, and studio space, together with the costs of personal protective equipment and insurance, are currently estimated to increase the cost of productions by up to 15%,” said Corus. “The shut-down and slow restart of Canadian productions has also meant that the Company’s ability to meet its current year regulatory requirements on Canadian programming expenditure (“CPE”) has been significantly hampered. Corus is currently assessing its obligations and the potential implications of not fulfilling its CRTC obligations in light of the ongoing pandemic. The Company is exploring relief in respect of its CRTC obligations.”
Overall, consolidated revenues declined 16% in the quarter ended Aug. 31 to $318.4 million and 10% for the year to $1,511.2 million. Net income attributable to shareholders was $30.3 million ($0.15 per share basic) for the quarter and net loss attributable to shareholders of $625.4million ($2.98 loss per share basic) for the year, which includes non-cash impairment charges recorded in the third quarter related to broadcast licenses and goodwill of $786.8 million.
Corus said advertising sales continue to be “materially impacted” by businesses that remain shut-down or have severely cut back on discretionary spending. It also noted that ongoing restrictions and business closures have increased uncertainty around accounts receivable collections for small to medium size businesses, and as a result it’s increased estimated credit losses.
The company said 70% of its workforce continues to work remotely as part of an “ease back” approach to its site plans to ensure the health of staff.
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