Corus Entertainment’s head office in Toronto.Fred Lum/The Globe and Mail
Corus Entertainment Inc. CJR-B-T reported lower revenue and profit for its fourth quarter and fiscal year, citing slowing advertising revenues, as lenders to the debt-heavy company attempt to arrange a possible restructuring.
Revenue for the television and radio media company dropped 14 per cent for the quarter ended Aug. 31 and 11 per cent for the year. Profit declined 39 per cent for the quarter and 33 per cent for the year, and its consolidated segment profit margins dropped by 5 per cent annually, the company reported Thursday morning.
The company posted a net loss attributable to shareholders of $328-million for the year, a result that included non-cash impairment charges of $263-million. This is an improvement on the previous year’s results, when the company lost $772-million.
This represents a $1.65 loss per share for the year.
Corus shares are trading at 9.5 cents on the Toronto Stock Exchange with a market cap of $17.7-million.
“Our fourth-quarter results reflect television advertising revenues that were modestly lower than our expectations, even as industry challenges persisted,” said Corus chief executive officer John Gossling in a release Thursday morning.
The Globe and Mail reported in early October that Corus’s lenders are working on a debt-for-equity swap that will restructure $1.1-billion in debt.
Creditor advisers and the Corus board are negotiating a deal to exchange $750-million of bonds for new shares that represent a majority equity stake in the company, currently controlled by Calgary’s Shaw family, along with a significantly smaller amount of debt.
Corus has declined to comment on the potential restructuring, and did not address it in its earnings report.
However, the company reported with its earnings that on Oct. 29, it completed an agreement to amend its credit agreement to increase the maximum amount that it may request as an advance on a revolving basis to $125-million, from $75-million.
This move will give Corus more flexibility as it aims to find cost efficiencies in the business, such as shutting down some channels that weren’t performing well enough.
Thursday’s results and the company’s outlook for the current quarter came below analyst expectations, according to Royal Bank of Canada analyst Drew McReynolds.
“We view Q4/25 results and the Q1/26 outlook as negative for the shares at current levels,” Mr. McReynolds said in a note to investors Thursday morning.
Television losses comprised a 23-per-cent decrease in advertising revenues, a 6.5-per-cent decline in subscriber revenues, and a 3.4-per-cent decline in distribution and production revenues, in part because of the company producing fewer episodes. Television employee costs were down 10 per cent in the quarter as a result of headcount reductions, the company said.
The company’s management expects advertising revenues to continue a similar decline in the current quarter owing to lower demand for linear advertising and macro uncertainty.
Editor’s note: This article has been updated to correct the current trading price of Corus stock.