Torstar Corp. reports Q4 profit, boosted by one-time gains, as ad revenue drops

TORONTO — Torstar Corp. reported a profit in its fourth-quarter, boosted by one-time gains related to its pension plans and the sale of two real estate properties in Ontario, even as print revenue continued to decline.

The publisher of the Toronto Star and other newspapers said Wednesday that its profit attributable to shareholders amounted to $14.1 million or 17 cents per share for the quarter ended Dec. 31. That compared with a loss attributable to shareholders of nearly $3.1 million or four cents per share in the fourth quarter a year earlier.

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Results in the quarter were boosted by one-time gains including $24.6 million related to the transfer of pension assets and liabilities to the Colleges of Applied Arts and Technology Pension Plan as well as a gain of $3.5 million related to the sale of two real estate properties in Ontario.

Adjusted earnings per share amounted to 11 cents in the fourth quarter of 2019 compared with an adjusted profit per share of 15 cents in the fourth quarter of 2018.

The company says it had an operating loss of $13.1 million in the quarter on operating revenue of $124 million, compared with an operating profit of $9.8 million on $144.9 million a year earlier.

Torstar says it's making progress on its business transformation, including increased digital subscriptions. The company reports it now has 28,000 digital-only subscribers, up from 10,000 a year earlier, after introducing the paid digital subscriptions in the third quarter of 2018.

Overall, the company says subscription revenue has somewhat stabilized.

"We have now experienced stable subscriber revenue for the fifth consecutive quarter, underpinned by our investment in data and our ongoing commitment to journalism," said Torstar Corp. CEO John Boynton on a conference call.

Advertising revenue, however, continues to be under pressure. Print advertising revenues were down 24 per cent from a year earlier and flyer distribution revenue down 16 per cent, which contributed to the company shutting down several free dailies, said Neil Oliver, president of daily news brands.

"As a result of these continued pressures on print advertising revenues, at the end of December, we ceased publication of the printed additions of the Star Metro free daily newspapers, in order to both reduce cost and transition to a digital-only new service outside of Ontario."

For 2019 as a whole, print advertising was down 21 per cent to $155.1 million, digital advertising down eight per cent to $60.3 million, and flyer distribution down 11.5 per cent, while subscriber revenue inched up one per cent to $119.7 million.

In early February the company announced it would sell the land and building used by the Hamilton Spectator for $25.5 million.

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Toronto Star parent Torstar holds an investment in The Canadian Press as part of a joint agreement with subsidiaries of the Globe and Mail and Montreal's La Presse.

This report by The Canadian Press was first published Feb. 26, 2020.

Companies in this story: (TSX:TS.B)

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