TVA Group Inc. ('TVA Group' or the 'Corporation') announced today that it recorded operating revenues in the amount of $119.5 million for the third quarter of 2020, a year-over-year decrease of $6.1 million.
Net income attributable to shareholders was $8.4 million for earnings per share of $0.19, compared with net income attributable to shareholders of $13.4 million for earnings per share of $0.31 for the same quarter of fiscal 2019.
Third quarter operating highlights: $23,363,000 consolidated adjusted EBITDA1 , a $7,778,000 unfavourable variance from the same quarter of 2019.
$16,938,000 in adjusted EBITDA1 in the Broadcasting segment, a $4,959,000 unfavourable variance due primarily to a 71.1% decrease in adjusted EBITDA1 of the specialty channels, particularly 'TVA Sports' which recorded a significant increase in costs for the current quarter as a result of the postponement of the National Hockey League ('NHL') playoffs, partially offset by a significant increase in adjusted EBITDA1 generated by TVA Network and commercial production services.
$2,947,000 in adjusted EBITDA1 in the Film Production & Audiovisual Services segment ('MELS'), a $3,535,000 unfavourable variance caused primarily by the decreased profitability of soundstage, mobile and equipment rental and visual effects services as a result of the current public health crisis. The segment's other activities posted increased profitability.
$2,999,000 in adjusted EBITDA1 in the Magazines segment, a $555,000 favourable variance resulting mainly from the performance of all titles, as cost savings outweighed the decrease in revenues, combined with additional grants to help publishers during the public-health crisis. $427,000 in adjusted EBITDA1 in the Production & Distribution segment, a $109,000 favourable variance due primarily to financial assistance from the Canada Media Fund to support production companies in the resumption of their activities.
'As expected, the COVID-19 pandemic continued impacting our business and on our third quarter 2020 results. The periodic resurgence of the virus and the various measures taken by government authorities to curb its spread continued to cause, among other things, a significant decline in advertising revenues; a large reduction in the sporting events broadcast by the 'TVA Sports' specialty channel, despite the broadcast of the NHL playoffs in the third quarter and a need to adapt our work environments and methods in order to protect the health and safety of our employees and the public. That said, our teams are primed and ready to resume activities, although the scope and pace of the resumption is still subject to factors such as the implementation of social distancing measures, which complicate or slow the production of certain types of content, the shaky resumption of sporting events, and the precarious situation of some of our advertisers,' commented France Lauziere, President and CEO of TVA Group
'I am proud of the work our people have been doing to pursue our mission of informing and entertaining the public under these difficult conditions. TVA Group's total market share increased by 3.2 points1 to 41.5%1 in the third quarter of 2020, while the specialty channels posted a 3.3-point increase1 as a result of a 2.0-point gain1 by 'LCN', which held its status as Quebec's most-watched specialty channel with a 7.1 share.1 The 'TVA Sports' channel also registered a 1.9-point increase due to the broadcast of the NHL playoffs in the third quarter of 2020 and the fact that the Montreal Canadiens qualified for the playoffs. Two sporting events in which the Montreal Canadiens appeared were among the top 30 most-watched shows in Quebec during the quarter. Three of the top five shows in Quebec during the quarter were on TVA Network, including La Voix, which was a standout again with an average audience of more than 1.5 million viewers,' said France Lauziere. 'The Film Production and Audiovisual Services segment's financial results continue to be affected by the pandemic. The public-health crisis brought all film shoots, including a Disney blockbuster, to a complete halt towards the end of the first quarter. Fortunately, shoots have been able to gradually start up again thanks to our people's efforts, which have made it possible for us to offer a full range of services again, in a safe environment. Also, we are very proud of the new service MELS has introduced, a virtual stage that offers an innovative alternative to conventional soundstages and facilitates compliance with physical distancing rules. The initiative is part of MELS' push to innovate and to pursue its technological shift,' added the President of TVA Group. 'While the decline in the magazines' operating revenues continued in the third quarter, it was mitigated by the additional financial assistance the Corporation has received. Our constant efforts to realize organizational synergies enabled us to reduce our operating expenses and generate a 24% margin, which is quite an accomplishment in the current business environment. TVA Group remains the largest publisher of French-language magazines in Quebec2 and the segment is making a positive contribution to the Corporation's earnings. 'The Production & Distribution segment, which includes the Incendo group's operations, performed strongly given the situation, which has hit production activities particularly hard. The segment stepped up the resumption of its activities, including two co-productions with New Zealand. In addition to diversifying our revenue streams and expanding our presence internationally, this strategy puts us in a good position to take advantage of the strong demand for original content we expect in the future. 'In conclusion, I want to highlight the outstanding work of all our employees throughout Quebec. They have made it possible for us to continue informing and entertaining Quebecers, and they are the architects of our recovery - under circumstances that demand a good deal of agility and adaptability. I thank them all,' Ms. Lauziere concluded.
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