Printing plant sale leads to positive quarter for Torstar
Declining ad revenue was offset by cost reductions and the sale of its printing plant.
Torstar reported a net income of $1.4 million for the third quarter of 2016, largely lead by the sale of the company’s Vaughan, ON-based printing plant. That’s compared with a net loss of $164.3 million in the third quarter of 2015.
That printing plant was closed by Torstar earlier this year, and sold for net proceeds of $53.6 million, recognizing a gain of $21.8 million on the sale.
Segmented salaries and benefits costs were down $13.9 million in the third quarter, including the absence of $1.1 million of digital media tax credits, and lower costs from restructuring initiatives.
The company posted a segmented operating loss of $15.2 million for the quarter. Segmented revenue was $181.7 million, down 9.8% from the $201.4 million in the third quarter of 2015.
Shifts in ad spending that have hurt Metroland Media Group and Star Media Group through 2016 to date are expected to continue early into the fourth quarter, according to a release. Torstar expects flyer distribution revenues will continue to experience moderate declines as well subscriber revenues.
Excluding the closure of Olive Media, digital revenue at Metroland Media Group and Star Media Group is expected to grow through the remainder of 2016, thanks to revenues from Toronto Star Touch, growth at TheStar.com and local advertising gains at Metroland Media Group.