CBC News 4/21/04
Disposal of Fireworks hits CanWest Global's Q2 bottom line
Last Updated: Wednesday, April 21, 2004 | 4:06 PM ET
CBC News
CanWest Global Communications (TSX:CGS.s) posted a second-quarter loss of $211 million, mainly due to losses and writedowns after the company decided to dispose of Fireworks Entertainment, its program production and international distribution arm.
The company said the loss was $1.19 a share. In the second quarter of last year, CanWest made a profit of $10 million (1 cent a share).
Consolidated revenues for the three-month period ended February 29, 2004 were $494 million, compared to $501 million for the same period in the previous year.
CanWest recorded a loss from discontinued operations – including Fireworks – of $170 million, including $143 million in non-cash charges to adjust the carrying value of those operations. The loss from the same operations in the same period last year was $4 million.
CanWest said it also took non-cash charges of $39 million to write down the value of Fireworks' library of Canadian film and television program rights.
Excluding the loss from discontinued operations and other charges, CanWest's loss in the current period would have been $2 million. Net earnings on the same basis last year would have been $13 million, which includes a gain of $21 million on the sale of the Ontario smaller-market newspapers.
"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," Leonard Asper, CanWest's president and CEO, said.
"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 said.
CanWest's class S shares gained 76 cents on Wednesday, ending at $11.45.
© CBC News
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