More red ink at Canwest

The net says it expects no economic upturn in 2009, and will continue to cut operating costs and seek regulatory relief in the face of weak ad revenue.

Canwest Global Communications saw its second-quarter loss balloon to $1.4 billion as it recorded a $1.19-billion non-cash write-down related mostly to the crumbling value of its newspaper business.

Canwest’s year-earlier loss was $34 million. Before restructuring and impairment expenses, the broadcaster saw its operating profit fall year-over-year by 31% to $75 million.

Revenue for the three months to Feb. 28 was $637 million, down 10% from $701 million in 2008.

The latest $1.4-billion non-cash hit to the publishing arm follows Canwest Global recording a $1-billion non-cash fourth-quarter write-down of its Canadian TV division last November.

During the latest quarter, Canadian TV revenue was flat, as conventional TV revenue was down 4% to $146.3 million, just as specialty channel revenue rose 4% to $87.5 million.

Canwest CEO Leonard Asper said the Q2 results reflected lowered profit expectations during the economic downturn, with specialty channels and online media as the sole bright spots in the media group.

Canwest added it expects no economic upturn in 2009, and so will continue to cut operating costs and seek regulatory relief from the CRTC and elsewhere in Ottawa in the face of weak advertising revenue.

Asper was also tight-lipped about Canwest’s debt woes during an analyst call, beyond spotlighting sales of non-core assets and negotiations with senior lenders and bondholders to possibly restructure his company’s balance sheet.

Canwest’s latest debt deadlines include April 14, to make a missed $30.4-million interest payment to US bondholders, and an April 21 deadline to rejig a $300-million credit facility.

Canwest also must make a $10-million payment by mid-May and another $57-million payment by mid-August on a $69-million debt swap liability.

‘There’s a lot of moving parts, and we can’t speculate,’ Asper said of his company’s current debt restructuring efforts to stave off possible bankruptcy protection.

From Playback Daily