Transcontinental Has Strong Profitability Gain on Lower Revenue in Q1
MONTREAL—March 17, 2010—Transcontinental’s profitability was up substantially in first quarter 2010 compared to first quarter 2009, for the third quarter in a row. Adjusted operating income before amortization rose 5% and 15% in the third and fourth quarters of 2009, and 41% in the first quarter of 2010. This growth is directly related to the measures implemented in 2009 to rationalize costs and improve efficiency, the reorganization and divestiture of certain operations and, to a certain extent, the stabilization in customer advertising spending.
Revenues were down 11% in the quarter, due to the negative impact of the exchange rate, the divestiture or closure of plants and publications, and paper prices. Excluding these latter items and thanks to the contribution of the two contracts with Rogers Communications, which took effect in 2009, and the contract to print the San Francisco Chronicle which started in July 2009, revenues were down only 2.7%.
“Our first quarter results show a marked increase in our profitability compared to the first quarter of 2009, and this is the third consecutive quarter in which it has improved,” said François Olivier, President and Chief Executive Officer. “I attribute our strong performance to four main factors: continued customer confidence in our products and services, the reorganization and sale of some of our operations, the rationalization plan that we quickly implemented last year, and the concerted efforts by our employees to develop greater efficiency. Furthermore, we kept investing to strengthen promising traditional areas as well as our new digital communication platforms and to develop new marketing services to meet the emerging needs of our customers. Which all helps to build the new Transcontinental day by day!
“Transcontinental is now a more flexible organization, and one that is even more focused on its strategic assets and priorities,” said Mr. Olivier. “With our enviable financial situation, strong brands, unique approach to combining print with digital, and investments, we will be able to keep providing our customers with custom and turnkey solutions, and take full advantage of opportunities as they arise in our markets.”