Exhibit 1
(CANWEST GLOBAL COMMUNICATIONS CORP. LOGO)
NEWS RELEASE
For Immediate Release
April 7, 2005
CANWEST REPORTS SIGNIFICANT INCREASE IN Q2 NET EARNINGS
Consolidated revenues and EBITDA(1) both up 4% for Q2
Year-to-date revenues and EBITDA(1) up 7% and 11%
WINNIPEG -- CanWest Global Communications Corp. today reported its financial
results for the three months ended February 28, 2005, the second quarter of its
2005 fiscal year. The Company reported consolidated net earnings of $28 million
or $0.16 per share for the quarter, compared to a consolidated net loss of $211
million, or $1.19 per share, for the second quarter of fiscal 2004. Results in
the previous year were affected by adjustment in the carrying value of
Fireworks, which is now accounted as a discontinued operation. Earnings from
continuing operations in the second quarter were $28 million, up significantly
from the $2 million loss from continuing operations reported for the same
quarter last year.
Consolidated revenues for the three month period ended February 28, 2005
increased by 4% to $689 million compared to consolidated revenues of $662
million for the same period in the previous year. Consolidated EBITDA1 for the
quarter was $149 million, a 4% increase from consolidated EBITDA of $143 million
for the same period in 2004.
The Company's South Pacific television operations continued to register strong
growth in the second quarter of 2005. Although results were affected by a slight
decline in the exchange rate value of the Australian dollar, TEN Television
Network recorded an 18% gain in EBITDA, to $59 million, compared to the same
quarter one year ago, on revenue growth of 7% for the quarter. TEN maintained
its ratings dominance in its target 16-39 demographic leading into the Easter
period. For the first five weeks of the Australian television season up to March
21 (Easter week is not rated in Australia), TEN held the top spot among viewers
16-39 years of age. Eye Corp., TEN's out-of-home advertising subsidiary,
registered a 38% increase in revenues to $25 million for the second quarter,
generating EBITDA of $5 million, an increase of 117% compared to the same
quarter last year, partially reflecting the acquisition of Eye Shop in the first
quarter of fiscal 2005.
In New Zealand, TVWorks revenue increased 7% and EBITDA was $2 million, compared
to $3 million for the second quarter last year. Additional costs related to the
development and start up of a new weeknight current affairs program - CAMPBELL
LIVE - and the re-launch of 3 NEWS accounted for a modest decline in EBITDA for
the quarter. Both new programs launched with impressive results, with the debut
broadcast of CAMPBELL LIVE taking first place against its established current
affairs competitors with a 28% share of the 18-49 year old audience. CAMPBELL
LIVE has also given
the network's flagship news program, 3 NEWS, higher profile. 3 NEWS made a 20%
gain in audience share in its time slot to bring the news program to within a
few share points of its main competitor.
RadioWorks' operations registered a 6% increase in revenues to $24 million for
the second quarter, and its EBITDA of $8 million increased by 2% compared to the
same quarter last year. CanWest's 45% interest in TV3 Ireland's generated an
EBITDA contribution of $2 million for the quarter, a 6% increase from the prior
year.
Revenues for the quarter from Canadian publishing and online operations
increased by 1% to $289 million compared to the second quarter in 2004. Canadian
publishing and online EBITDA declined by 3% for the quarter, reflecting normal
cost inflation and planned expense increases in a relatively flat revenue
environment. Revenues at Canadian broadcasting operations increased by 2% to
$164 million for the quarter, whereas EBITDA of $26 million was below last
year's quarterly result of $30 million, due primarily to increased programming
and promotion costs and costs related to restructuring, as well as normal cost
increases.
Commenting on the second quarter results, Leonard Asper, CanWest's President and
Chief Executive Officer, said, "Net earnings increased significantly from the
second quarter of last year, with reduced interest expense arising from the
Company's successful debt reduction program contributing substantially to that
improvement. Revenues were up at all of our operations, in spite of difficult
market conditions for both newspapers and conventional television in Canada. Our
Australian, New Zealand and Irish operations continue to show strong revenue
growth. We are particularly pleased with Eye Corp. where a major restructuring
of two years ago and a recent expansion into New Zealand have generated
substantial revenue and EBITDA momentum. In Canada, Global Television generated
modest revenue growth compared to a year ago, although we still have work to do
to regain Global's traditional leadership position in Canadian audience ratings.
The underlying strength of our newspapers was demonstrated by their revenue
growth for the quarter compared to the same period last year, in the face of an
overall newspaper industry decline in ad spending. The Company continues to
invest in new programming and marketing initiatives to restore Global's ratings
and to strengthen the brands of our television and newspaper operations."
SIX MONTHS ENDED FEBRUARY 28, 2005
For the six-month period, the Company recorded consolidated net earnings of $64
million or $0.36 per share, compared to a consolidated net loss of $130 million
or $0.73 per share for the first six months of 2004. Excluding all charges
related to Fireworks, earnings from continuing operations for the first half of
2005 were $64 million or $0.36 per share compared to $82 million or $0.46 per
share for the first six months of 2004. Earnings for the first six months of
2005 were also affected by charges related to debt retirement, including swap
losses, foreign exchange gains, and the $44 million loss on extinguishment of
subordinated debentures (the Hollinger "PIK" notes). The total effect of these
charges, net of income taxes and income tax recoveries related to prior years
was $55 million for the first six months of 2005 compared to $10 million for the
same period in 2004. Excluding the effects of these charges, earnings from
continuing operations for the first six months of 2005 would have been $118
million, compared to $92 million for the same period in 2004.
For the six month period ended February 28, 2005, the Company recorded
consolidated revenues of $1,561 million, an increase of 7% compared to
consolidated revenues of $1,462 million for the first six months of the prior
year. Consolidated EBITDA for the first six months of fiscal 2005 was $438
million, 11% ahead of consolidated EBITDA of $394 million for the first six
months of 2004.
HIGHLIGHTS OF THE SECOND QUARTER
- The Company received a cash distribution of $98.9 million from
Network TEN Australia during Q2, and will receive a dividend of
NZ$6.3 million from CanWest MediaWorks (NZ) Limited in mid-May.
- In March, the Company entered into a joint venture with Torstar
Corporation and Metro International S.A. to publish English-language
free daily newspapers in various Canadian cities. Each partner has a
33.3% interest in the new venture, which commenced with the launch
of METRO VANCOUVER on March 14. METRO VANCOUVER is being distributed
free of charge through boxes situated in high-traffic locations
including transit stops, university campuses and highly populated
business districts. Initial daily distribution for the Greater
Vancouver Area is 145,000. The joint venture launched METRO OTTAWA
on March 31, and plans to launch similar METRO newspapers in other
Canadian cities.
- On March 4, 2005, the Company appointed David Drybrough, F.C.A, a
native of Winnipeg, as Interim Chair of its Board of Directors. Mr.
Drybrough replaced the Hon. Frank McKenna, who had resigned as Chair
to become Canada's Ambassador to the United States of America.
- On April 4, 2005, the Company launched, DOSE, a revolutionary
multi-media brand aimed at young Canadians. DOSE includes Canada's
first free daily magazine, with 320,000 copies to be distributed
every weekday in Calgary, Edmonton, Ottawa, Toronto and Vancouver.
The online presence at DOSE.CA will be the most comprehensive, free
interactive service in the country, including an easy-to-use music
channel and a leading edge wireless portal.
This news release contains certain comments or forward-looking statements that
are based largely upon 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's financial statements are available on the Company's website:
www.canwestglobal.com.
CanWest Global Communications Corp. (NYSE: CWG; TSX: CGS.SV and CGS.NV,
www.CanWestglobal.com), an international media company, is Canada's largest
media company. In addition to owning the Global Television Network, CanWest is
Canada's largest publisher of daily newspapers, and also owns, operates and/or
holds substantial interests in conventional television, out-of-home advertising,
specialty cable channels, Web sites and radio networks in Canada, New Zealand,
Australia and Ireland.
CANWEST GLOBAL COMMUNICATIONS CORP.
BUSINESS SEGMENT INFORMATION
(UNAUDITED)
(IN THOUSANDS OF CANADIAN DOLLARS)
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
---------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 29,
2005 2004 2005 2004
REVENUE
Television
Canada 163,718 160,977 363,999 352,229
Australia - Network TEN 154,573 144,106 401,424 357,066
New Zealand - 3 and C4 23,104 21,563 58,855 51,944
Ireland - TV3 8,461 7,759 19,782 17,619
------------ ------------ ------------ ------------
349,856 334,405 844,060 778,858
Radio - New Zealand 24,412 23,108 48,175 44,466
Publications and online - Canada 289,467 286,302 615,226 601,403
Outdoor - Australia 24,918 18,050 53,822 37,742
------------ ------------ ------------ ------------
CONSOLIDATED REVENUE 688,653 661,865 1,561,283 1,462,469
============ ============ ============ ============
OPERATING PROFIT
TELEVISION
Canada 25,671 29,958 81,163 86,128
Australia - Network TEN 58,773 49,787 178,965 142,137
New Zealand - 3 and C4 2,119 3,052 16,796 12,913
Ireland - TV3 2,284 2,162 7,254 5,886
------------ ------------ ------------ ------------
88,847 84,959 284,178 247,064
Radio - New Zealand 8,110 7,930 15,995 15,017
Publications and online - Canada 54,930 56,573 140,300 139,726
Outdoor - Australia 4,904 2,257 12,697 6,624
Corporate and other (8,095) (8,224) (14,869) (14,537)
------------ ------------ ------------ ------------
TOTAL SEGMENT OPERATING PROFIT (EBITDA)(1) 148,696 143,495 438,301 393,894
============ ============ ============ ============
(1) EBITDA is defined as earnings before interest, income taxes, depreciation,
amortization, interest rate and foreign currency swap losses, foreign exchange
gains, investment gains, losses and write-downs, loss on debt extinguishment,
dividend income, minority interests, interest in earnings (loss) of equity
accounted affiliates, realized currency translation adjustments and loss from
discontinued operations. This supplementary earnings measure does not have a
standardized meaning prescribed by Canadian generally accepted accounting
principles and may not be comparable to similar measures presented by other
companies nor should it be viewed as an alternative to net earnings. The
reconciliation of EBITDA to net earnings is evident on the face of the following
consolidated statements of earnings (loss).
CANWEST GLOBAL COMMUNICATIONS CORP.
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(UNAUDITED)
(IN THOUSANDS OF CANADIAN DOLLARS EXCEPT AS OTHERWISE NOTED)
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
---------------------------- ----------------------------
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 29,
2005 2004 2005 2004
Revenue 688,653 661,865 1,561,283 1,462,469
Operating expenses 368,242 357,881 778,166 744,205
Selling, general and administrative expenses 171,715 160,489 344,816 324,370
------------ ------------ ------------ ------------
148,696 143,495 438,301 393,894
Amortization of intangibles 4,958 4,550 9,897 9,088
Amortization of property, plant and equipment 23,325 23,126 45,005 45,698
Other amortization 1,318 1,084 2,497 2,389
------------ ------------ ------------ ------------
Operating income 119,095 114,735 380,902 336,719
Interest expense (61,126) (86,221) (134,334) (173,502)
Interest income 839 1,251 1,485 5,951
Amortization of deferred financing costs (3,120) (1,899) (5,321) (4,017)
Interest rate and foreign currency swap losses (22,608) (17,423) (67,206) (16,103)
Foreign exchange gains 13,947 436 24,443 5,126
Investment gains, losses and write-downs (1,689) (3,063) (54) (2,814)
Loss on debt extinguishment -- -- (43,992) --
Dividend income -- -- -- 1,415
------------ ------------ ------------ ------------
45,338 7,816 155,923 152,775
Provision for (recovery of) income taxes (1,124) (2,554) 36,059 27,896
------------ ------------ ------------ ------------
Earnings before the following 46,462 10,370 119,864 124,879
Minority interests (17,968) (14,345) (56,375) (45,599)
Interest in earnings (loss) of equity accounted
affiliates 596 (186) 1,047 (349)
Realized currency translation adjustments (848) 2,626 (848) 3,126
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS
28,242 (1,535) 63,688 82,057
Loss from discontinued operations (46) (209,742) (77) (211,838)
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) FOR THE PERIOD 28,196 (211,277) 63,611 (129,781)
============ ============ ============ ============
EARNINGS (LOSS) PER SHARE FROM CONTINUING
OPERATIONS:
BASIC $0.16 ($0.01) $0.36 $0.46
DILUTED $0.16 ($0.01) $0.36 $0.46
EARNINGS (LOSS) PER SHARE:
BASIC $0.16 ($1.19) $0.36 ($0.73)
DILUTED $0.16 ($1.19) $0.36 ($0.73)
For further information contact:
Geoffrey Elliot John Maguire
Vice President, Corporate Affairs Chief Financial Officer
Tel: (204) 956-2025 Tel: (204) 956-2025
Fax: (204) 947-9841 Fax: (204) 947-9841
gelliot@canwest.com jmaguire@canwest.com