Transcontinental Generates Organic Revenue and Profit Growth
MONTREAL—Sept. 7, 2011—Transcontinental’s revenues increased 2 percent in the third quarter of 2011, from $481.3 million to $492.6 million. This increase was primarily due to a number of new contracts, most notably from the expanded relationship with The Globe and Mail. Excluding acquisitions, divestitures and closures, the impact of the exchange rates and the paper component variance, organic revenue growth was 2 percent, driven primarily by the Printing sector.
Adjusted operating income was flat at $57.2 million, while the adjusted operating income margin slightly decreased from 11.9 percent to 11.6 percent. The contribution from new contracts coupled with the synergies associated with the use of our most productive assets and continued efficiency improvement initiatives in the Printing sector was compensated by more difficult market conditions in the Media sector, more specifically related to the educational book publishing division, continued strategic investments in the Interactive sector and the negative impact of the exchange rates. However, we generated 6 percent of organic growth.
Net income applicable to participating shares decreased 63 percent, from $28.9 million to $10.6 million. This decrease is mainly due to a net loss related to the discontinuance of our operations in Mexico. Excluding unusual items and discontinued operations, adjusted net income applicable to participating shares decreased 2 percent, from $33.4 million to $32.8 million.
“I am satisfied with our third quarter results, especially with the fact that we have generated organic revenue and profit growth for the sixth consecutive quarter in an industry that faces increasing competition,” said François Olivier, president and CEO. “In the past few months, we pursued our strategy to strengthen our existing assets by making strategic acquisitions, divesting less core businesses and rationalizing certain activities.
“We also developed our offering of products and services on the digital side by expanding our digital advertising representation relationships as well as mobile partnerships. We will continue with our plan to transform Transcontinental to meet our customers’ evolving needs. In the next few months we will launch new digital products and services and make use of our most productive assets in order to continue to grow and transform Transcontinental,” added Olivier.