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TORONTO (Reuters) - Postmedia Network PNCb.TO, which operates Canada's largest chain of newspapers, more than tripled its earnings from ongoing operations in the first quarter, despite a sharp reduction in advertising spending, the company said on Wednesday.
Postmedia, whose papers include the flagship National Post, as well as the Montreal Gazette, Ottawa Citizen and Vancouver Sun, had net earnings from continuing operations of C$14.3 million ($14 million) and revenue of C$231.1 million in the three months to the end of November.
It made C$4.6 million on that basis a year ago, on revenue of C$254.1 million.
Much of the gain was due to lower restructuring costs.
Print advertising slipped almost 12 percent from a year earlier to C$149.4 million. Digital and circulation revenue was flat.
"In this first quarter of our second year, we continue to see the effects of a slower than expected economic recovery," Postmedia CEO Paul Godfrey said in the earnings statement.
"Some of our largest national advertisers have scaled back their spending and these cuts are being felt across our industry.
The company, created in July 2010 to buy the newspaper assets of bankrupt Canwest, has cut costs and sought to reshape its titles for the digital age to increase revenue from its websites, smartphone and tablet apps, and other services.
Postmedia sold three daily newspapers and twenty community publications in British Columbia to Glacier Media for C$86.5 million in late 2011, and reported earnings from those assets as discontinued operations.
The proceeds were used to help make debt repayments of C$90.8 million on a U.S. dollar-denominated term loan.
At the end of the quarter the company owed $251 million under credit facilities and $275 million on 12.5 percent senior secured notes.
Postmedia's more widely held Class B shares have fallen almost 15 percent over the past three months and were unchanged Wednesday at C$7.75 on the Toronto Stock Exchange.
Reporting by Alastair Sharp; editing by Rob Wilson