Corus profit margins lower, citing end of CEWS.

Corus Entertainment Inc.'s profits were hit by the loss of approximately $12 million in wage subsidies and regulatory fee relief that didn't recur in 2022, as the consolidated profit margin dropped to 24 per cent from 31 per cent a year ago. Corus chief financial officer John Gosslin made the comments on a Friday morning earnings call with analysts for the company's second quarter. The federal government launched the Canada Emergency Wage Subsidy (CEWS) in 2020 to help those companies that were struggling from the effects of the COVID-19 pandemic, and the program has since expired. In December of 2020, the government waived the Part II licensing fees for Canadian broadcasters because of the effects of the pandemic, fees which have also since returned. In August of 2021, the CRTC rejected a broader package of regulatory relief requested by the Canadian Association of Broadcasters a year previously. Corus CEO Doug Murphy also praised the government's introduction of legislation that seeks to facilitate the remuneration of news outlets by digital platforms, known as C-18. "We welcome that. We're pleased that the government moved forward," Murphy said. "It was nice to see the broadcast community included in that." Corus' overall revenue for the three months that ended Feb. 28 grew to $361.7 million from $358.9 million in the same quarter of 2021. Television revenue was relatively flat, increasing slightly to $339.7 million from $338.5 million a year ago, while radio revenues grew to $22 million from 20.4 million a year ago. The company's net income fell to $19.9 million from $39.9 million a year ago. Corus attributed the decrease in segment profit to $86.6 million from 112.6 million a year ago partially to the ending of the CEWS that had boosted profits in the second quarter of 2021, as well as a $1 million restructuring cost in the quarter (which was itself lower than the $3 million the company spent on restructuring a year ago). The television segment profit margin dipped to 27 per cent from 35 per cent in the second quarter of 2021, while radio fell to one per cent from seven per cent over the same comparison. Advertising revenue dipped slightly to $184.7 million from $185.8 million a year ago, while subscriber revenue climbed to 132.8 million from 124.2 million this time last year. RBC Capital market analyst Drew McReynolds wrote in a Thursday morning quote that while revenues and profits were slightly below expectations, "we believe Corus largely navigated a choppy quarter that included Omicron, supply chain headwinds, the Olympics" and "tough" year-over-year comparisons like the wage subsidy and the restoration of CRTC licensing fees.

Corus profit margins lower, citing end of CEWS.

Brief | April 8, 2022

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Corus profit margins lower, citing end of CEWS.

Brief | April 8, 2022

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