CanWest earnings soar
$41.2 mil one-time gain drives 176% increase
The increase in net earnings to C$100.5 million ($68.2 million) or 45¢ a share from $24.8 million or 17¢ a share for the same quarter a year earlier was primarily due to a one-time gain of $41.2 million or 27¢ a share -- the proceeds from the sale of 19% of its Australian TV holdings, Ten Television Network. CanWest reduced its share of Ten Television to 57% at the behest of Oz government and regulatory officials.
Net earnings without the one-time gain were $27 million, an increase of 9% over the same quarter last year, and broadcast operating profit before amortization and corporate and development expenses for the three-month period actually declined 2%, to $55.0 million from $56.0 million.
During the third quarter of fiscal 1998, CanWest acquired Fireworks Entertainment Inc., a Toronto-based independent pro-duction company, and in the course of a bitter (and ultimately unsuccessful) duel for control of WIC Western Intl. Communications Ltd., CanWest increased its stake in the Canadian media giant to about 44%.
The Canadian media is abuzz with rumors of an impending deal between CanWest Global and WIC's other major shareholders to carve up WIC's assets. "We continue to explore several avenues with the other WIC principals to determine how this unique and valuable asset can best be structured to maximize its value and contribution," VP finance and CFO John Maguire said in a press release.
For the nine months ended May 31, CanWest reported a 55% hike in net earnings to $123.4 million from $79.6 million; without the proceeds of the Ten TV sale and discounting a $4 million foreign currency hit in the first quarter caused by the decline in the Australian dollar, the increase is 12%, to $86.3 million from $76.8 million. Revenues were up 11% for the same period, from $428.6 million to $475.3 million.
(Mark Woods in Sydney contributed to this report.)
