On Thursday, Canada’s largest newspaper publisher, Postmedia Network Canada Corp., reported a net loss of $28.4 million in the fourth-quarter, down from just below the break even point in the same period in 2011, as it booked a $9.2 million loss that was related to debt refinancing, lower revenue, and increased restructuring that was offset, in part by lower operating costs.
Paul Godfrey, the CEO and President of Postmedia said in a statement that they expect the print ad market to remain a challenge in 2013. As a result, they are in the process of implementing a three-year transformation project to significantly reduce operating costs and focus on development of their digital products.
Print ad revenues declined 8.3%, reflecting a trend playing out across North American newspaper industry over the last decade as readers turn to digital news sources. Online ads have not replaced the loss. The newspaper industry predicts digital advertising re-coup around $1 for every $7 lost in print advertising space.
Revenue dropped 5.9% to $190.1 million from last year. $202.2 million in print ad revenue dropped. Digital revenue increased 3.5% compared to the same period last year.
Operating expenses less depreciation, restructuring and amortization decreased 4%.
Postmedia’s three-year restructuring includes downsizing the news wire service and giving up the editorial production of the newspaper pages to its Hamilton, Ont operations. It also cancelled the Sunday publication of its newspapers in Calgary,Ottawa, and Edmonton.
Postmedia said these plans, and others will be put in place throughout the fourth-quarter of 2012 and the first quarter of 2013 should generate $35 – $40 million in costs savings annually.