WINNIPEG, Nov. 2 /PRNewswire-FirstCall/ -- CanWest Global
Communications Corp. today reported financial results for its
fourth quarter and for its fiscal year ended August 31, 2006. For
the twelve-month period, the Company reported net earnings of $179
million or $1.01 per share, compared to $10 million or $0.06 per
share reported for fiscal 2005. Net earnings in fiscal 2006
included a $164 million gain on the sale of TV3 Ireland in the
fourth quarter. Consolidated revenues were $2,879 million for the
year, a decline of 5% compared to consolidated revenues of $3,032
million for fiscal 2005. Consolidated EBITDA(1) for fiscal 2006 was
$509 million, a 28% decline from consolidated EBITDA of $710
million for fiscal 2005. The Company recorded net earnings of $155
million for the fourth quarter ended August 31, 2006 compared to a
net loss of $106 million for the same period in 2005. Consolidated
revenues for the three-month period ended August 31, 2006 were $655
million, a decline of 6% from $694 million for the quarter one year
ago. Consolidated EBITDA for the quarter was $78 million, compared
to consolidated EBITDA of $84 million for the same period in 2005.
Commenting on the results, Leonard Asper, CanWest's President and
Chief Executive Officer, said, "All our major operations faced
difficult advertising markets over the past year with adverse
currency translation contributing further to declines in results
from the South Pacific. Markets now appear to be stabilizing and we
expect a firming of revenues and EBITDA in the new fiscal year. Our
publications group posted a substantial increase in EBITDA in the
fourth quarter as the impact of actions taken earlier in the year
to reduce costs began to take hold. A strong start in the Fall
ratings is tracking to improving revenues at our Canadian
television operations and should be reflected in EBITDA growth for
the first quarter. Other notable developments during the year
include the successful IPO of our publications group, which
contributed substantially to the financial strength and flexibility
of the Company, the sale of our interest in TV3 Ireland and our
international growth in radio with two new radio licences in the UK
and the acquisition of four established stations in Turkey. The
international expansion of Eye Corp, with major deals concluded in
Singapore, the UK and most recently in the US, was also a notable
achievement." Segmented Results for Fiscal 2006 Revenues for the
Company's publications and interactive operations for the year were
$1,258 million, 2% higher than revenues of $1,229 million for the
same period in fiscal 2005. Publications and interactive EBITDA of
$248 million for the year was down 3% from $255 million in fiscal
2005. The EBITDA decline was primarily attributable to start up
losses associated with the free commuter daily magazine Dose and
CanWest's share of losses of the Metro joint venture. In June, the
Company converted the print version of Dose to an on-line version
only. Severance costs related to this and other restructuring
initiatives in fiscal 2006 amounted to $11 million. A significant
rebound in national advertising and growth in online classified
products was offset by weakness in the automotive sector and in
newspaper classified advertising. The CanWest MediaWorks Limited
Partnership declared distributions which resulted in an amount
payable to CanWest of $133 million for the period from October 13,
2005 to August 31, 2006. Network TEN's $197 million contribution to
CanWest's consolidated EBITDA, represented a decline of 33% from
$294 million for fiscal 2005, primarily due to a slowdown in the
television advertising market that affected all broadcasters in
Australia. An 8% decline in the rate of currency translation of
Australian results to Canadian currency was also a significant
factor. Network TEN continued to post strong ratings performance,
again leading in its target 16-39 young adult demographic while
also winning the number one position in the wider 18-49
demographic. There were indications that the television ad market
had stabilized by the end of the fiscal year and we expect an
improving trend in revenues in fiscal 2007. Weak advertising
markets and currency translation also affected Eye Corp, TEN's
wholly-owned out-of-home advertising business. Revenues for the
year grew by 1% to $109 million while EBITDA declined by 15% to $20
million. Eye Corp invested significantly in international expansion
during the year and landed major airport advertising deals for the
Changi International Airport in Singapore and the three airports of
the Manchester Airports Group (MAG) in the UK. Following the end of
the year Eye Corp announced a major expansion into the US through
the acquisition of a US shopping mall advertising company that will
bring Eye Shop to over 200 shopping malls throughout the US.
CanWest MediaWorks (NZ) Limited faced similar advertising market
and currency translation challenges in the second half of fiscal
2006. In local currency terms the Company's New Zealand operations
recorded a 2% revenue gain for the year and flat EBITDA as compared
to the prior year's result. However when translated into Canadian
currency consolidated revenues declined by 11% to $193 million,
while EBITDA was 12% lower at $50 million compared to the previous
fiscal year. Revenues at TVWorks were down 11% to $109 million,
with EBITDA declining by 14% to $26 million for the year. A solid
line-up of locally produced series, international hit programs and
substantial growth in audiences for its re-launched evening news
program 3News, increased 3's audience share in its target 18-49
year old demographic as well as in the older 24-54 demographic.
RadioWorks' recorded a 10% revenue decline for the year to $84
million, while EBITDA of $24 million at RadioWorks was 9% below the
result for the prior year. Based upon these results, CanWest
MediaWorks NZ declared a final 2006 dividend of NZ 3.9 cents per
share payable in November, which will result in aggregate dividends
of NZ$13 million to be received by CanWest in respect of fiscal
2006. Canadian television operations experienced a 6% decline in
revenues for fiscal 2006 to $656 million from $696 million in
fiscal 2005. EBITDA of $31 million for the year was 75% below the
result for the prior year due to substantially higher costs
associated with ratings-driven investment in Canadian and
international programming during a weak revenue environment. That
investment was beginning to pay off at the end of the year with
increases in airtime revenue in the fourth quarter and indications
of continuing gains as we move into fiscal 2007. Global had several
programs in the top ten in the major Toronto and Vancouver markets
including the Survivor-Cook Island, House, Prison Break, and Rock
Star. Global's ET Canada, solidified its hold on the number one
position among Canadian entertainment magazine programs. Global
National also became the number one national news program in 2006.
Canadian broadcast operations incurred charges of $11 million for
the year as a result of restructuring initiatives and associated
severance costs. Highlights of the fourth quarter and the ensuing
period - In August 2006 the Company completed the sale of its
interest in TV3 Ireland. Net proceeds from the sale, of
approximately $179 million, were used to pay down debt in
September. CanWest recorded a gain of $164 million on the sale of
its Irish assets. - Also in August, the Company announced the
appointment of Mr. Derek H. Burney, O.C., of Ottawa, as Chairman of
the Board of Directors. Mr. Burney joined the Board in April, 2005
and took over from Interim Chairman David Drybrough, Mr. Drybrough
will remain on the Board and continue to serve as Chair of the
Audit Committee. - In September 2006, CanWest was awarded a second
commercial radio station licence in the UK, to be located in
Bristol, Britain's eighth largest city. This new radio licence
follows the earlier radio licence awarded to CanWest in September
2005 for an FM radio station serving the Solent region on the South
coast of England. Original 106 went on-air on October 1, 2006 from
a new studio complex in Southampton, England. No date has yet been
announced for the launch of the new station in Bristol that will
also be branded Original 106. - In October, 2006 the Company
entered into an agreement for the sale of its two Canadian radio
stations, 99.1 Cool FM in Winnipeg and 91.5 The Beat FM located in
Kitchener Ontario to Corus Entertainment. Net proceeds of
approximately $15 million will also be applied to debt reduction.
Completion of the transaction is subject to regulatory approval by
the CRTC. - In October, 2006, both Houses of the Australian
parliament passed legislation that will remove foreign ownership
restrictions and relax cross-media ownership rules affecting the
media industry in that country. CanWest has retained Citigroup
Global Markets Inc., to explore opportunities for the Company in
that evolving environment. - The 2006 Raise A Reader campaign
completed its most successful campaign yet in September, raising
$2.2 million to support literacy programs in cities across Canada,
an increase of 18% over 2005 thanks to the hard work and generosity
of 3,500 volunteers and national and local sponsors. Raise A Reader
has raised $7.5 million since the first national campaign in 2002.
Most importantly we delivered a very powerful message on behalf of
all Canadians on the importance of improving our literacy levels. -
Global TV became a leader in on-line distribution, being the first
Canadian broadcaster to negotiate streaming rights to U.S. programs
including major hits such as Survivor, Deal or No Deal, and 1
vs.100. In addition, Global National is now available daily through
video podcasts and bbTV. bbTV, launched in partnership with Rogers
Wireless, is the world's first video player for BlackBerry devices.
Outlook: As we move into fiscal 2007 we anticipate a gradual
improvement in overall operating results. Our operations in the
South Pacific are well-positioned to benefit from stabilizing and
firming of advertising markets in Australia and New Zealand. The
positive earnings trend of the publications operations should
continue in fiscal 2007 as actions already taken to contain and
reduce costs take hold and continue. There are also signs that we
have turned a corner at our Canadian television operations with
significantly improved ratings and resumption of revenue growth. In
addition, continued progress in reducing debt in 2006 has
significantly reduced annual interest expense, while augmenting the
financial strength and flexibility of the Company to pursue
strategic opportunities. New media opportunities continue to prove
profitable as canada.com, FPInfomart, our websites and mobile
content distribution strategies are met with approval from our
consumers and advertisers. Forward Looking Statements: This news
release contains certain comments or forward-looking statements
about the objectives, strategies, financial conditions, results of
operations and businesses of CanWest. Statements that are not
historical facts are forward-looking and are subject to important
risks, uncertainties and assumptions. These statements are based on
our current expectations about our business and the markets in
which we operate, and upon various estimates and assumptions. The
results or events predicted in these forward-looking statements may
differ materially from actual results or events if known or unknown
risks, trends or uncertainties affect our business, or if our
estimates or assumptions turn out to be inaccurate. As a result,
there is no assurance that the circumstances described in any
forward-looking statement will materialize. Significant and
reasonably foreseeable factors that could cause our results to
differ materially from our current expectations are discussed in
the section entitled "Risk Factors" contained in our Annual
Information Form for the year ended August 31, 2005 dated November
28, 2005 filed by CanWest Global Communications Corp. with the
Canadian securities commissions (available on SEDAR at
http://www.sedar.com/ ) and with the U.S. Securities and Exchange
Commission under Form 40-F (available on EDGAR at
http://www.sec.gov/), as updated in our most recent Management's
Discussion and Analysis for the three months and twelve months
ended August 31, 2006, dated November 2, 2006. We disclaim any
intention or obligation to update any forward-looking statement
even if new information becomes available, as a result of future
events or for any other reason. The Company's financial statements
are available on the Company's website:
http://www.canwestglobal.com/. The Company will hold its regular
quarterly conference call with analysts on November 2, 2006 at 5:00
p.m. Eastern Standard Time. The call-in numbers are 416-644-3418 or
866-250-4877. Replays are also available for five days following
the call at 416-640-1917 or 877-289-8525 using the pass-code
21205353 followed by the number sign. CanWest Global Communications
Corp. (http://www.canwestglobal.com/), (TSX: CGS and CGS.A, NYSE:
CWG) an international media company, is Canada's largest media
company. In addition to owning the Global Television Network,
CanWest also owns, operates and/or holds substantial interests in
Canada's largest publisher of daily newspapers, and conventional
television, out-of-home advertising, specialty cable channels, web
sites and radio stations and networks in Canada, New Zealand,
Australia, Turkey, Singapore, Indonesia, Malaysia, the United
Kingdom and the United States. CANWEST GLOBAL COMMUNICATIONS CORP.
BUSINESS SEGMENT INFORMATION (unaudited) (in thousands of Canadian
dollars) For the three months For the twelve months
-------------------- --------------------- ended August 31, ended
August 31, ---------------- ---------------- 2006 2005 2006 2005
REVENUE Publications and Interactive - Canada 293,211 290,242
1,258,455 1,228,851 ----------- ----------- ----------- -----------
Television Canada 129,444 133,340 656,275 696,106 Australia -
Network TEN 156,580 187,439 656,306 783,315 New Zealand - 3 and C4
25,432 33,192 108,886 122,995 ----------- ----------- -----------
----------- 311,456 353,971 1,421,467 1,602,416 -----------
----------- ----------- ----------- Radio New Zealand - RadioWorks
19,345 22,199 83,926 93,428 Turkey 3,480 - 5,726 - -----------
----------- ----------- ----------- 22,825 22,199 89,652 93,428
----------- ----------- ----------- ----------- Outdoor - Australia
27,693 27,165 109,051 107,790 ----------- ----------- -----------
----------- CONSOLIDATED REVENUE 655,185 693,577 2,878,625
3,032,485 ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- SEGMENT OPERATING
PROFIT Publications and Interactive - Canada 52,877 38,869 248,429
254,875 ----------- ----------- ----------- ----------- Television
Canada (22,049) (12,545) 31,487 126,425 Australia - Network TEN
38,662 61,634 197,229 293,528 New Zealand - 3 and C4 7,100 7,746
25,939 30,110 ----------- ----------- ----------- -----------
23,713 56,835 254,655 450,063 ----------- ----------- -----------
----------- Radio New Zealand - RadioWorks 5,644 5,732 23,990
26,392 Turkey 1,234 - 2,610 - ----------- ----------- -----------
----------- 6,878 5,732 26,600 26,392 ----------- -----------
----------- ----------- Outdoor - Australia 3,935 5,149 19,593
23,173 ----------- ----------- ----------- ----------- 87,403
106,585 549,277 754,503 Corporate and other (9,528) (11,078)
(39,928) (32,065) Ravelston management contract termination -
(12,000) - (12,750) ----------- ----------- ----------- -----------
OPERATING PROFIT (EBITDA)(1) 77,875 83,507 509,349 709,688
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- (1) EBITDA is defined as
earnings before interest, income taxes, depreciation, amortization,
interest rate and foreign currency swap losses, foreign exchange
gains, investment gains, losses and write- downs, goodwill
impairment expense, asset impairment expense, loss on debt
extinguishment, dividend income, minority interests, interest in
earnings of equity accounted affiliates, realized currency
translation adjustments and earnings (loss) from discontinued
operations. This supplementary earnings measure does not have a
standardized meaning prescribed by Canadian generally accepted
accounting principles and may not be comparable to similar measures
presented by other companies nor should it be viewed as an
alternative to net earnings. The reconciliation of EBITDA to net
earnings is evident on the face of the following consolidated
statements of earnings (loss). CANWEST GLOBAL COMMUNICATIONS CORP.
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (UNAUDITED) (In
thousands of Canadian dollars except as otherwise noted) For the
three For the twelve ------------- -------------- months ended
months ended ------------ ------------ August 31, August 31, August
31, August 31, 2006 2005 2006 2005 Revenue 655,185 693,577
2,878,625 3,032,485 Operating expenses 379,808 385,331 1,551,852
1,532,939 Selling, general and administrative expenses 197,502
212,739 817,424 777,108 Ravelston management contract termination -
12,000 - 12,750 ----------- ----------- ----------- -----------
77,875 83,507 509,349 709,688 Amortization of intangibles 1,285
5,456 12,423 20,341 Amortization of property, plant and equipment
21,762 22,985 94,171 90,943 Other amortization 1,275 1,484 7,383
5,197 ----------- ----------- ----------- ----------- Operating
income 53,553 53,582 395,372 593,207 Interest expense (49,270)
(58,549) (194,216) (251,120) Interest income 908 489 2,510 2,766
Amortization of deferred financing costs (1,540) (4,294) (6,494)
(12,708) Interest rate and foreign currency swap losses (6,194)
(64,034) (138,639) (121,064) Foreign exchange gains (losses) 4,526
2,637 (7,941) 8,583 Investment gains, losses and write-downs (769)
1,296 102,490 1,527 Goodwill impairment expense - (41,406) -
(41,406) Asset impairment expense - (9,629) - (9,629) Loss on debt
extinguishment (521) - (117,401) (43,992) ----------- -----------
----------- ----------- 693 (119,908) 35,681 126,164 Provision for
(recovery of) income taxes (16,192) (33,062) (76,022) 20,226
----------- ----------- ----------- ----------- Earnings before the
following 16,885 (86,846) 111,703 105,938 Minority interests
(23,089) (17,971) (102,067) (96,597) Interest in earnings of equity
accounted affiliates 1,219 492 2,612 2,043 Realized currency
translation adjustments (4,086) 1,078 (6,883) 622 -----------
----------- ----------- ----------- Net earnings (loss) from
continuing operations (9,071) (103,247) 5,365 12,006 Gain on sale
of discontinued operations 163,547 - 163,547 - Earnings (loss) from
discontinued operations 389 (2,813) 9,760 (1,801) -----------
----------- ----------- ----------- Net earnings (loss) for the
period 154,865 (106,060) 178,672 10,205 ----------- -----------
----------- ----------- ----------- ----------- -----------
----------- Earnings (loss) per share from continuing operations:
Basic ($0.05) ($0.58) $0.03 $0.07 Diluted ($0.05) ($0.58) $0.03
$0.07 Earnings (loss) per share: Basic $0.87 ($0.60) $1.01 $0.06
Diluted $0.87 ($0.60) $1.01 $0.06 DATASOURCE: CanWest Global
Communications Corp. CONTACT: Geoffrey Elliot, Vice President,
Corporate Affairs, Tel: (204) 956-2025, Fax: (204) 947-9841, ; John
Maguire, Chief Financial Officer, Tel: (204) 956-2025, Fax: (204)
947-9841,
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