Postmedia loss doubles to $58M on weak ad sales, loonie hit

Newspaper and media conglomerate Postmedia lost $58 million in the second quarter, more than double the amount during the same period a year ago, in part because of currency fluctuations.

The company's net lossin the quarter ended Feb.28, 2015 was $58.2 million, compared to $25.3 million in the same period in the prior year.

The main reason for the increasewas given as currency fluctuations, as the declining value of the loonie compared to U.S. dollars hurts the company because most of its debt is in U.S. dollars but its revenues are almost entirely in Canadian dollars.

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Overall, Postmedia took in $145.4 million in revenue during the quarter. That's down from $162 million in the same three-month stretch a year earlier.

Postmedia said the main reason for the decline was a 16 per cent or $14.4 million decline in print advertising revenue. Digital ad sales were also down 2.8 per cent or about $600,000.

"The continuing shift in advertising dollars from print advertising to advertising in other formats, particularly online and other digital platforms including search and social media websites, combined with periods of economic uncertainty have resulted in significant declines in print advertising," the company said in a regulatory filing."This shift is expected to continue and appears to be permanent."

Circulation revenue was also down 4.3 per cent or $2 million.

Along with lower revenues, the company managed to trim its expenses, cutting costs by$7.8 million or5.5 per cent partlyas a result of outsourcing of the production of the Montreal Gazette in August 2014 and both The Vancouver Sun and The Province in February 2015.

Late last year, Postmediaannounced an ambitious plan to buy the Sun Media chain of newspapers from Quebecor. That deal has since passed all of its regulatory hurdles, and Postmediasaid Thursday it expects that deal to become final on April 13.

"As we ready Postmedia to take on greater scope and scale, with the addition of the Sun Media brands, our focus continues to be engaging audiences across four platforms and providing advertisers with innovative made- in-Canada marketing solutions," CEO Paul Godfrey said."We look forward to welcoming our new employees and brands and together we will continue the transformation of Postmedia into a newsmedia organization poised to take on foreign-based digital giants."