Astral Media Inc. (AAIAF.PK)
F3Q10 (Qtr End 05/31/10) Earnings Call
June 15, 2010 10:30 am ET
Andre Bureau – Chairman
Ian Greenberg – President and CEO
Claude Gagnon – SVP and CFO
Adam Shine – National Bank Financial
Paul Steep – Scotia Capital
Scott Cuthbertson – TD Newcrest
Tim Casey – BMO Capital Markets
David McFadgen – Cormark Securities
Juan [ph] – Canadian Press
Good morning, ladies and gentlemen. Welcome to Astral’s fiscal 2010 third quarter financial results conference call. At this time, all participants are in a listen-only mode. I would like to remind you that after the presentation, the analysts will be invited to ask questions first, followed by the members of the media. Instructions will be provided at that time for you to queue up for questions.
I would like to remind everyone, that this conference call is being recorded on Thursday, July 15, 2010 at 10:30 AM Eastern Time. (Operator Instructions)
It is now my pleasure to introduce Mr. Andre Bureau, Chairman of the Board of Astral. Please go ahead sir.
Thank you. Good morning, everyone. (Foreign Language) I’m Andre Bureau, Chairman of the Board of Astral, and I'm joined this morning by Ian Greenberg, President and Chief Executive Officer; Claude Gagnon, Senior Vice President and Chief Financial Officer; Robert Fortier, Vice President of Finance; Jacques Parisien, Group President, Astral Radio and Astral Outdoor; and Pierre Boisseau, Assistant Vice President, Corporate Communications.
On behalf of all of us here from our new executive offices in Montreal, I would like to welcome you to this third quarter conference call for fiscal 2010. During the course of this call, Ian and Claude will give you an overview of the results, after which we will proceed with the question-and-answer period. As usual, we will take questions from analysts first followed by questions from the media. (Foreign Language)
Merci Andre. Good morning, everyone, and thank you for joining us. I’m obviously delighted by the performance reported by the company in the third quarter. As you read in the press release issued earlier today, our overall revenues grew 9% in the third quarter, $253.6 million, while EBITDA increased 4% to $84.9 million. Net earnings and earnings per share each grew 9% over the same period last year, rising to $48.5 million or $0.86 per share.
I’m particularly pleased by the fact that this is the first time since the beginning of the recession in early fiscal 2009 that all three of our business units are reporting year-over-year increases for the quarter, each contributing strongly to the growth of our results at all level.
Now turning to the performance of each of our division. Our Television Group reported a strong third quarter with an increase of 9% in revenues. This solid performance is attributable to a 7% growth for subscriber revenues combined with an outstanding 17% of advertising revenues.
I’m particularly pleased that while the Quebec French Television advertising market was flat in the third quarter. Astral’s French TV properties delivered a robust 16% advertising revenue growth. Moreover, each of Astral’s TV properties showed growth over the corresponding period last year, a feat that we are very proud of.
On the Pay-TV side, the number of subscribers for The Movie Network and Super Écran grew by 72,000 to 1,814,000 subscribers, a solid 4% increase over the same period last year. We’ve also continue to invest strategically to further strengthen our TV offering. On July 5th we launched Playhouse Disney télé channel, a French language service offering the best of Disney’s content to pre-school kids.
We also continued to broaden our online TV offering with the launch of our HBO Canada programming through the Bell TV Online service and with the addition of over 125 hours of weekly programming from our French and English-language pay and specialty television services on Videotron's new illico web online platform launched in June.
Now turning to our Radio Group, we are pleased to see a return to growth in radio, with a solid 9% revenue increase and a 6% EBITDA growth for the third quarter. Third quarter also saw NRJ’s Les Grandes Gueules went back a number one position in the important driver [ph] segment in the Montreal market.
Other key radio investments in recent months also include the launch of the new EZ Rock station targeting women in the Ottawa-Gatineau market, as well as, the re-branding of our VIBE 98-5 station in Calgary into Astral’s fifth Virgin Radio station in Canada.
Finally, our Out-of-Home Group reported a 10% revenue increase and 11% EBITDA growth in the third quarter. These results were fueled by particularly strong performance of our Toronto street furniture program, as well as, the contribution of our digital outdoor advertising network, which expanded into a national platform over the past few months.
This is an illustration that the deployment of our innovative Out-of-Home product is rapidly bearing fruit. But the recent addition of two new phases in Toronto, our network now consist of 23 phases in Canada’s top three advertising markets.
Before I close, I would like to highlight a major milestone reached in last quarter. On May 27th, we proudly launched Astral’s new corporate identity. Our new brand is a vibrant demonstration of our company’s evolution over the years, as it reflects the attribute of our unique culture focused on providing innovative and tailored advertising solutions to the clients, as well as, on delivering rich and exciting content to consumers through a variety of platforms across the country.