EXHIBIT 2
(CANWEST GLOBAL COMMUNICATIONS CORP. LOGO)
NEWS RELEASE
For Immediate Release
April 21, 2004
CANWEST REPORTS SECOND QUARTER RESULTS FOR F2004
Strong growth posted in Canadian publications and South Pacific groups
WINNIPEG: CanWest Global Communications Corp. today reported its financial
results for the three months ended February 29, 2004, the second quarter of its
2004 fiscal year.
Consolidated revenues for the three month period ended February 29, 2004 were
$494 million compared to consolidated revenues of $501 million for the same
period in the previous year. On a pro forma basis, consolidated revenues were
$484 million for the second quarter of fiscal 2003.
On a combined basis, including the Company's 56.6% proportional share of Network
TEN, combined revenues of $586 million for the quarter were 2% higher than
revenues on the same basis for the same quarter last year. Compared to last year
on a pro forma basis, combined revenues increased by 5% from $556 million,
reflecting strong results in Canadian publishing and all of the Company's South
Pacific operations.
Consolidated earnings before interest, taxes, depreciation and amortization
(EBITDA) in the second quarter of fiscal 2004 were $53 million, after recording
a $39 million non-cash charge related to the impairment in the value of
Fireworks' Canadian film and television library. Excluding this charge,
consolidated EBITDA in the second quarter of fiscal 2004 was $92 million
compared to $98 million reported last year. On a pro forma basis, consolidated
EBITDA last year was $95 million.
On a combined basis, and excluding one-time charges related to Fireworks, EBITDA
of $121 million this quarter increased 6% compared to EBITDA of $114 million on
a pro forma basis last year.
Results for fiscal 2003 have been restated on a pro forma basis to exclude the
revenue and EBITDA contributions of certain newspaper assets in Ontario that
were sold on February 14, 2003.
Commenting on the results, Leonard Asper, CanWest's President and Chief
Executive Officer, said, "Results for the second quarter demonstrate the value
of CanWest's diversification strategy and particularly our holdings in Australia
and New Zealand broadcasting assets, which offset the disappointing results from
Canadian conventional television. Our Canadian newspaper assets also recorded
significant revenue and EBITDA gains compared to last year. The positive trends
of our international operations and at our Canadian newspapers operations should
continue through the balance of fiscal 2004, and we remain hopeful that the
improving economy will increasingly be evident in our Canadian television
results as the year progresses."
Overall, continued strong performances at all of the Company's South Pacific
broadcasting operations, together with steady year-over-year gains in Canadian
newspaper operations, were offset by reductions in revenue and EBITDA from
Canadian broadcasting that reflected an overall market weakness in that sector.
Canadian publishing revenues were $275 million for the quarter, up 5% from pro
forma revenues of $263 million for the corresponding period last year. EBITDA
for the quarter increased by 14% to $57 million from the pro forma result of $50
million for the second quarter of fiscal 2003.
The Company's international operations continued to register significant gains.
CanWest's 56.6% interest in TEN's EBITDA increased by 50% to $28 million for the
quarter, compared to $19 million in the same period last year. Australian Rules
Football as well as popular US and Australian sitcoms, drama and news
programming helped to move TEN into a tie for second place in the 25-54 age
demographic, while retaining its traditional strong position in its core 16-39
demographic. Eye Corp, TEN's out-of-home advertising division, registered a 24%
increase in revenues to $10 million for the second quarter, generating EBITDA of
over $1 million, an EBITDA gain of almost 200% compared to the same quarter last
year.
The Company's 3 and C4 Television Networks in New Zealand reported EBITDA of $3
million compared to a small loss for the second quarter of fiscal 2003. New
Zealand radio operations registered a 47% increase in EBITDA to $8 million
compared to $5 million for the second quarter of fiscal 2003. CanWest's 45%
interest in TV3 Ireland's EBITDA was $2 million for the quarter, 12% higher than
for the same period last year.
The revenue trend experienced in Canadian broadcasting in the first quarter
continued through December and January, with an improvement over last year
reported in February. This resulted in Canadian broadcast revenues for the
quarter of $161 million this year, down 6% from the $171 million recorded for
the same period last year. EBITDA from Canadian broadcast operations was $30
million, compared to $42 million for the same quarter in the prior period.
As recently announced, the Company has made the decision to dispose of
Fireworks, and Fireworks has commenced a process to sell its library of
international film and television program rights. Accordingly, the results of
this operation have been classified as discontinued operations. The loss from
discontinued operations for the quarter was $170 million, including $143 million
in non-cash charges to adjust the carrying value of discontinued operations to
their estimated fair value. The loss from the same operations in the same period
last year was $4 million. In addition, there were non-cash charges of $39
million to adjust the value of Fireworks' library of Canadian film and
television program rights to their estimated fair value. It is Fireworks'
current intention to sell these rights as well, and commencing in the third
quarter, these amounts will be included in the loss from discontinued
operations.
The Company's net loss for the quarter was $211 million or $1.19 per share
compared to net earnings of $10 million or $0.01 per share for the second
quarter of fiscal 2003. Excluding the loss from discontinued operations and
other non-cash charges described above, the net loss in the current period would
have been $2 million. Net earnings on the same basis last year would have been
$13 million, including a gain of $21 million on the sale of the Ontario smaller
market newspapers.
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Mr. Asper added, "While we are disappointed with the outcome at Fireworks, this
decision should be viewed as a positive step in conserving capital, and one
which should contribute to improving the Company's free cash flow and debt
reduction ability."
"The Company continues to look at growth and expansion opportunities in Canada
and elsewhere but, as before, our main priorities are to accelerate the
reduction of corporate debt, improve operating margins and increase profits,"
Asper concluded.
SIX MONTHS ENDED FEBRUARY 29, 2004
For the six month period ended February 29, 2004, the Company recorded
consolidated revenues of $1,057 million compared to pro forma consolidated
revenues of $1,054 million for the first six months of the prior year. Combined
revenues in the current year of $1,282 million increased 4% over pro forma
combined revenues of $1,232 million for the first six months of the previous
year.
Excluding the one-time, non-cash charges related to Fireworks, consolidated
EBITDA for the first six months of fiscal 2004 was $246 million compared to $274
million last year. On a combined basis and excluding the Fireworks charges,
EBITDA was $331 million, 3% ahead of the pro forma combined result of $321
million last year.
For the six-month period ended February 29, 2004, the Company recorded a net
loss of $130 million or $0.73 per share. Excluding all charges related to
Fireworks, earnings in the current period would have been $82 million or $0.46
per share, compared to $82 million or $0.42 per share last year.
OPERATING HIGHLIGHTS AND COMMENTARY
Highlights for the quarter and the period since November 30, 2003 include the
following:
- - At its meeting on April 21, the Company's Board of Directors appointed
The Honourable Frank McKenna, P.C. Q.C. to the position of Chairman of
the Board of the Company. Mr. McKenna was previously serving as Interim
Chairman since the passing on October 7, 2003 of the Company's founder,
I. H. Asper, O.C., O.M., Q.C.
- - The Company continues to roll out Web-based electronic editions of our
newspapers with subscriptions now available at the National Post,
Ottawa Citizen, Vancouver Sun and The Province, the Calgary Herald,
Edmonton Journal and the Gazette in Montreal. We expect to roll out
electronic editions at our remaining large city newspapers by the end
of June 2004. Initial interest in electronic editions has been very
encouraging, with significant numbers of new subscribers being readers
who did not previously subscribe to the newspapers.
- - Our Canadian television program schedule continued to strengthen, with
excellent ratings and several outstanding new programs including The
Apprentice and Average Joe, as well as continuing solid performers such
as Fear Factor and Survivor. Global continued to attract the highest
ratings and market share in the Greater Vancouver market with 7 of the
top ten shows while CanWest stations garnered 5 of the top ten shows in
the Greater Toronto market. Many of Global's top shows will be
returning to its schedule next fall.
3
- - In December, Network TEN, secured a new five-year A$700 million
syndicated loan facility on favourable terms, that will help to reduce
TEN's financing costs. In January, the Company received $100 million
(A$103.5 million) in previously announced distributions of interest and
dividends.
- - Subscribers for the Company's specialty cable networks continue to
grow, with Prime's subscriber base now topping 5 million.
This news release contains comments or forward-looking statements that are based
largely on the Company's current expectations and are subject to certain risks,
trends and uncertainties. These factors could cause actual future performance to
vary materially from current expectations. The Company may not update or revise
any forward-looking statements or comments, whether as a result of new
information, future events or otherwise.
The Company's financial statements are available on the corporate website,
www.canwestglobal.com.
CanWest Global Communications Corp. (NYSE: CWG; TSX: CGS.S and CGS.A,
www.canwestglobal.com) is an international media company. CanWest, Canada's
largest publisher of daily newspapers, owns, operates and/or holds substantial
interests in newspapers, conventional television, out-of-home advertising,
specialty cable channels, Web sites and radio networks in Canada, New Zealand,
Australia, Ireland and the United Kingdom.
For more information, please contact:
Geoffrey Elliot John Maguire
Vice President, Corporate Affairs Chief Financial Officer
Ph: (204) 956-2025 Ph: (204) 956-2025
Fax: (204) 947-9841 Fax: (204) 947-9841
gelliot@canwest.com jmaguire@canwest.com
(30)
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CANWEST GLOBAL COMMUNICATIONS CORP. (1)
BUSINESS SEGMENT INFORMATION
(UNAUDITED)
(IN THOUSANDS OF CANADIAN DOLLARS)
FOR THE THREE MONTHS ENDED
-----------------------------------------
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
2004 2003 2003
ACTUAL ACTUAL PROFORMA (2)
REVENUE
TELEVISION
Canada 161,217 171,320 171,320
Australia - Network TEN 81,676 63,703 63,703
New Zealand - 3 and C4 21,817 19,242 19,242
Ireland - TV3 7,759 7,863 7,863
-------- -------- --------
272,469 262,128 262,128
RADIO - NEW ZEALAND 23,108 19,165 19,165
PUBLICATIONS AND ONLINE - CANADA 275,029 279,541 262,813
ENTERTAINMENT - CANADA 7,098 4,731 4,731
OUTDOOR - AUSTRALIA 10,231 8,256 8,256
Inter-segment revenue (1,872) (1,070) (1,070)
-------- -------- --------
TOTAL COMBINED REVENUE(1) 586,063 572,751 556,023
Elimination of equity accounted affiliates(3) (91,907) (71,959) (71,959)
-------- -------- --------
TOTAL CONSOLIDATED REVENUE 494,156 500,792 484,064
======== ======== ========
OPERATING PROFIT
TELEVISION
Canada 29,958 42,492 42,492
Australia - Network TEN 28,222 18,877 18,877
New Zealand - 3 and C4 3,052 (270) (270)
Ireland - TV3 2,162 1,928 1,928
-------- -------- --------
63,394 63,027 63,027
RADIO - NEW ZEALAND 7,930 5,393 5,393
PUBLICATIONS AND ONLINE - CANADA 56,573 52,959 49,779
ENTERTAINMENT - CANADA 359 834 834
OUTDOOR - AUSTRALIA 1,280 460 460
-------- -------- --------
SEGMENT OPERATING PROFIT 129,536 122,673 119,493
Corporate expenses 8,224 5,582 5,582
Film and television program impairment expense 38,790 -- --
-------- -------- --------
COMBINED OPERATING PROFIT (EBITDA)(1) 82,522 117,091 113,911
Elimination of equity accounted affiliates(3) (29,502) (19,337) (19,337)
-------- -------- --------
CONSOLIDATED OPERATING PROFIT (EBITDA) 53,020 97,754 94,574
======== ======== ========
(1) Segmented results include the Company's 56.6% economic interest in
Network TEN.
(2) Proforma results exclude the results of community newspapers sold
February 14, 2003.
(3) Elimination of proportionate interest in Australia's Network TEN and
Outdoor, which are equity accounted in the consolidated financial
statements.
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CANWEST GLOBAL COMMUNICATIONS CORP. (1)
BUSINESS SEGMENT INFORMATION
(UNAUDITED)
(IN THOUSANDS OF CANADIAN DOLLARS)
FOR THE SIX MONTHS ENDED
---------------------------------------------
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
2004 2003 2003
ACTUAL ACTUAL PROFORMA (2)
REVENUE
TELEVISION
Canada 352,674 385,826 385,826
Australia - Network TEN 203,063 159,942 159,942
New Zealand - 3 and C4 52,680 45,453 45,453
Ireland - TV3 17,619 17,964 17,964
---------- ---------- ----------
626,036 609,185 609,185
RADIO - NEW ZEALAND 44,466 37,010 37,010
PUBLICATIONS AND ONLINE - CANADA 578,487 598,287 558,331
ENTERTAINMENT - CANADA 15,089 12,174 12,174
OUTDOOR - AUSTRALIA 21,455 18,463 18,463
Inter-segment revenue (3,710) (2,960) (2,960)
---------- ---------- ----------
TOTAL COMBINED REVENUE(1) 1,281,823 1,272,159 1,232,203
Elimination of equity accounted affiliates(3) (224,518) (178,405) (178,405)
---------- ---------- ----------
TOTAL CONSOLIDATED REVENUE 1,057,305 1,093,754 1,053,798
========== ========== ==========
OPERATING PROFIT
TELEVISION
Canada 86,128 123,889 123,889
Australia - Network TEN 80,862 55,902 55,902
New Zealand - 3 and C4 12,913 6,973 6,973
Ireland - TV3 5,886 5,915 5,915
---------- ---------- ----------
185,789 192,679 192,679
RADIO - NEW ZEALAND 15,017 10,747 10,747
PUBLICATIONS AND ONLINE - CANADA 139,726 134,753 124,648
ENTERTAINMENT - CANADA 1,094 1,724 1,724
OUTDOOR - AUSTRALIA 3,769 1,329 1,329
---------- ---------- ----------
SEGMENT OPERATING PROFIT 345,395 341,232 331,127
Corporate expenses 14,537 10,469 10,469
Film and television program impairment expense 38,790 -- --
---------- ---------- ----------
COMBINED OPERATING PROFIT (EBITDA)(1) 292,068 330,763 320,658
Elimination of equity accounted affiliates(3) (84,631) (57,231) (57,231)
---------- ---------- ----------
CONSOLIDATED OPERATING PROFIT (EBITDA) 207,437 273,532 263,427
========== ========== ==========
(1) Segmented results include the Company's 56.6% economic interest in
Network TEN.
(2) Proforma results exclude the results of community newspapers sold
February 14, 2003.
(3) Elimination of proportionate interest in Australia's Network TEN and
Outdoor, which are equity accounted in the consolidated financial
statements.
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CANWEST GLOBAL COMMUNICATIONS CORP.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(IN THOUSANDS OF CANADIAN DOLLARS EXCEPT AS OTHERWISE NOTED)
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
----------------------------- ----------------------------
FEBRUARY 29, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
2004 2003 2004 2003
Revenue 494,156 500,792 1,057,305 1,093,754
Operating expenses 270,592 267,707 542,644 533,498
Selling, general and administrative expenses
131,754 135,331 268,434 286,724
Film and television program impairment
expense 38,790 -- 38,790 --
---------- ---------- ---------- ----------
53,020 97,754 207,437 273,532
Amortization of intangibles 4,375 4,375 8,750 8,750
Amortization of property, plant and equipment 18,587 18,301 36,989 37,386
Other amortization 1,084 2,470 2,389 3,852
---------- ---------- ---------- ----------
Operating income 28,974 72,608 159,309 223,544
Interest expense (79,719) (90,066) (161,156) (179,476)
Interest income 1,251 -- 5,951 --
Amortization of deferred financing costs (1,821) (2,371) (3,905) (4,813)
Interest rate swap losses (16,548) (8,867) (17,043) (8,853)
Foreign exchange gains (losses) 436 (45) 5,126 (64)
Investment gains net of write down (3,063) 22,108 (2,814) 22,108
Dividend income -- -- 1,415 1,533
---------- ---------- ---------- ----------
(70,490) (6,633) (13,117) 53,979
Provision for (recovery of) income taxes (9,485) (10,585) 2,948 6,852
---------- ---------- ---------- ----------
Earnings (loss) before the following (61,005) 3,952 (16,065) 47,127
Interest in earnings of Network TEN 17,699 10,884 56,592 36,661
Interest in loss of other equity accounted
affiliates (186) (449) (349) (779)
Realized currency translation adjustment 2,626 (900) 3,126 (900)
---------- ---------- ---------- ----------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS (40,866) 13,487 43,304 82,109
Loss from discontinued operations (170,411) (3,606) (173,085) (3,793)
---------- ---------- ---------- ----------
NET EARNINGS (LOSS) FOR THE PERIOD (211,277) 9,881 (129,781) 78,316
========== ========== ========== ==========
EARNINGS (LOSS) PER SHARE FROM CONTINUING
OPERATIONS:
BASIC ($0.23) $0.03 $0.24 $0.42
DILUTED ($0.23) $0.03 $0.24 $0.42
EARNINGS (LOSS) PER SHARE:
BASIC ($1.19) $0.01 ($0.73) $0.40
DILUTED ($1.19) $0.01 ($0.73) $0.40
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