Soft ad market hits Rogers’ bottom line

The company's Q4 results were impacted by the media department, largely on account of drops in advertising revenue.
rogersMedia

Pressures on the traditional media business continued to impact the bottom line at Rogers Communications, according to its Q4 2015 results, leading to a slight drop in overall adjusted operating profit.

The company’s adjusted operating profit dropped by 1% for the quarter, moving from $1.23 billion for the three months ended Dec. 31, 2014 to $1.22 billion for the same period at the end of 2015.

Adjusted operating profit at Rogers Media was down 28% for the quarter, mainly due to drops in revenue in conventional TV and publishing. Adjusted operating profit moved from $78 million for the three months at the end of 2014 to $56 million for the same period in 2015.

Though revenues for the quarter were partially offset by the post-season success of the Toronto Blue Jays (both the club and broadcast media), continued declines in TV and publishing advertising and lower sales at The Shopping Channel (TSC) dampened results.

A weaker ad market led Rogers Media to announce an upcoming round of job cuts to the division earlier this week, with 4% or about 200 jobs to be cut beginning in February.

Operating revenue in the division moved from $544 million for the three months ended Dec. 31, 2014 to $560 million for the same period in 2015. Revenue boosts in the quarter came from higher game day ticket and merchandise sales for the Toronto Blue Jays and higher subscription and advertising revenue on Sportsnet’s properties.

Higher sports production costs led Rogers Media to post an 8% increase in expenses for the quarter. That number was kept in check because of  lower conventional TV programming costs, lower publishing costs and efficiencies being found across the division.