Corus Entertainment says while viewership was up across its platforms in the third quarter, the impact of COVID-19 coupled with one-time impairment charges, resulted in a 24% drop in revenue for the three months ended May 31.
Corus reported consolidated revenues of $349.0 million, down $458.4 million year-over-year, with consolidated segment profit at $111.3 million in Q3, a decrease of 35% from $170.5 million last year. Net loss attributable to shareholders for the quarter was $752.3 million (a $3.61 loss per share basic), compared to net income of $66.4 million ($0.31 per share basic) last year.
In Television, segment revenues dropped 21% in the quarter and 8% year-to-date, with ad revenue down 31% for Q3 and 12% year-to-date. Subscriber revenues were flat in Q3 and down 1% year-to-date. Merchandising, distribution and other revenues decreased $2.6 million (12%) in Q3 2020 and increased $8.3 million (15%) year-to-date. Segment profit was down 30% in Q3 2020 and down 12% year-to-date. Corus also recorded a non-cash goodwill impairment charge in Q3 of $673.0 million.
In Radio, segment revenues decreased $19.3 million (52%) in the quarter and $25.1 million (23%) year-to-date. Segment profit was down $11.5 million (118%) and $12.9 million (47%) year-to-date, with the radio segment recording non-cash impairment charges on broadcast licenses of $67.8 million in Q3 and goodwill of $46.0 million.
“Corus remains focused on our essential role in delivering news, information and entertainment to communities across Canada in the face of the challenges brought on by COVID and its significant impact on our third quarter results,” said Doug Murphy, President and CEO, in a release. “I am extremely proud of our team and their extraordinary dedication, at a time when it is critical to keep Canadians connected and informed.”
“In Q3, we saw increased viewership and engagement across all of our platforms, as Canadians rediscovered the power of television and Corus. With the economy materially impacted by the COVID pandemic, these audiences were not optimally monetized as advertising demand is tightly correlated to sales and economic activity,” continued Murphy. “This week we held our virtual Upfront, revealing a very strong fall schedule which, when coupled with these recent viewing trends, gives us reasons for optimism in the coming year. Notably, our subscriber revenue remained resilient, benefitting from the accelerated uptake of STACKTV. In this unprecedented environment, Corus remains intensely focused and disciplined as we manage the business, advance our strategic priorities and maintain a solid financial position.”
Corus also provided a COVID-19 update, saying it’s continuing to closely monitor the evolution of the coronavirus situation. The company says it won’t rush to return its staff to their worksites, continuing to operate with more than 70% of its staff working remotely.
The company says it’s taking an “ease back” approach to returning staff to its offices that could include reduced occupancy at some sites, or modified workspaces.
Corus says it remains committed to increasing its financial flexibility over the longer term and in the current environment is conserving cash out of an abundance of caution. The company reported free cash flow of $90.8 million for the quarter and $208.9 million year-to-date.
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