3 Min Read
(Adds dividend, earnings details, analyst and share reaction)
By Alastair Sharp
TORONTO, July 27 (Reuters) - Torstar Corp slashed its dividend and reported a wider second-quarter loss on Wednesday, sending its shares lower, as the owner of one of Canada's largest circulation newspapers struggled with slumping print advertising revenue.
The publisher of the Toronto Star and a string of community newspapers said lower revenue trends have extended into the current quarter, but it was difficult to predict performance for the rest of 2016.
Torstar cut its annual dividend to 10 cents a share, from 26 cents. It had already halved its payout earlier this year. Its shares fell 2.4 percent to C$1.62 on the Toronto Stock Exchange.
Like other North American newspaper publishers, Torstar faces weakening print advertising sales as it invests in digital initiatives it hopes will plug the revenue gap.
Revenue from Torstar's Metroland and Star Media units fell a combined C$27.9 million. But its much smaller digital ventures unit - which includes its majority stake in online forum company VerticalScope - grew sales by just C$7.5 million from a year earlier.
The company, which eliminated an online paywall for the Toronto Star in April, is betting heavily on its Toronto Star Touch app, but said uptake has been slower than expected.
Its net loss from continuing operations was C$24.3 million, or 30 Canadian cents a share, compared with a net loss of C$1.1 million, or 1 cent a share, in the same period the year before. Revenue fell by 9.4 percent to C$196.5 million.
The company said its adjusted loss per share was 13 Canadian cents. Analysts had on average expected Torstar to post a loss of 20 Canadian cents a share on revenue of C$192 million, according to Thomson Reuters I/B/E/S.
RBC Capital Markets analyst Drew McReynolds said in a note the results were a modest negative, picking out a slight reduction in its pension solvency deficit and digital ventures growth as bright spots.
Torstar has worked to cut costs, outsourcing printing of the Star and killing the print version of the Guelph Mercury in January. It is trying to sell its printing facility.
The company is searching for both a new chief executive and a new Toronto Star publisher. Chief Executive David Holland plans to retire later this year after seven years in the job. John Cruickshank stepped down as Star publisher in May. (Additional reporting by Matt Scuffham; Editing by Jeffrey Hodgson)