Transcontinental Posts Income Declines on Revenues Increase
MONTREAL—June 7, 2012—Transcontinental Inc. increased its revenues by 6 percent in the second quarter, from $498.7 million to $529.4 million, driven primarily by the acquisition of Quad/Graphics Canada, as well as numerous acquisitions and launches of community newspapers in Quebec, and new contracts such as Canadian Tire. This growth was mitigated primarily by the sale of its black-and-white book printing business, destined for U.S. exports, to Quad/Graphics last September and by lower volume from the non-recurring revenue from the printing contract for the Canadian Census last year.
|(Figures in millions of Canadian dollars)||Q2-2012||Q2-2011||%|
|Adjusted operating income||55.8||60.2||(7%)|
|Adjusted net income applicable to participating shares||35.4||39.1||(9%)|
|Net income applicable to participating shares||(106.2)||32.7||–|
For this same period, adjusted operating income decreased 7 percent, from $60.2 million to $55.8 million, driven primarily by a new provincial legislation in Quebec under Bill 88 that imposes greater recycling fees on publishers, lower volume from the non-recurring revenue from the printing contract for the Canadian Census last year and lower volume from its educational book publishing group due to the end of the school reform in Quebec. This decrease was partially offset by synergies from the use of its most productive assets.
Net income applicable to participating shares decreased from $32.7 million to a loss of $106.2 million. This decrease is mainly due to an impairment of assets of $180.0 million, in the newspaper and magazine activities of the Media sector, which is non-cash and non-operational. Excluding unusual items and discontinued operations, adjusted net income applicable to participating shares decreased 9 percent, from $39.1 million to $35.4 million.
Operating Highlights of the Quarter
• Since January 2012, renewed and expanded six multiyear agreements valued at over $1.5 billion in revenues with major Canadian retail customers in the food, hardware, general merchandise and pharmaceutical verticals.