TORONTO (Reuters) - Postmedia Network (PNCb.TO), which publishes Canada's largest chain of newspapers, reported a bigger quarterly loss on Tuesday as its print advertising revenues dropped.
Postmedia, whose papers include the flagship National Post, as well as the Montreal Gazette, Ottawa Citizen and Vancouver Sun, said its net loss for its fiscal third quarter, ended May 31, rose to C$12.1 million ($11.85 million) from a year-earlier loss of C$2.7 million.
The company was created to buy the newspaper assets of bankrupt media company Canwest. It is attempting to cut costs by reshaping its titles for the digital age and increasing revenue from its websites, smartphone and tablet apps, and other services.
Postmedia said its revenue in the most recent quarter fell nearly 7 percent to C$212 million. Gains in digital revenue helped offset some of the declines in print circulation revenue.
"While we continue to face a challenging and uncertain outlook with respect to our traditional business model, we are aggressively launching initiatives that proactively support our transformation from a print newspaper publisher to a digital and audience-focused media company," Chief Executive Paul Godfrey said in a statement.
Postmedia said the initial phase of initiatives aimed at reducing legacy newspaper infrastructure costs include the shutdown of its breaking news service and the cancellation of Sunday editions in three markets.
Those initiatives, along with others, will be implemented over the remainder of 2012, delivering annualized cost savings of between C$35 million and C$40 million, the company said. Postmedia expects the entire three-year transformation program to result in operating cost savings of 15 percent to 20 percent.
Last month, Postmedia said it will sell its headquarters in Toronto to the Rose & Thistle Group for about C$24 million. The proceeds of the sale will be used to repay debt, it said.
In the quarter ended May 31, Postmedia made total debt repayments of US$7.5 million. Its outstanding long term debt now consists of US$240.0 million under a term-loan credit facility and US$268.6 million in the form of senior secured notes.
$1=$1.02 Canadian Reporting by Euan Rocha; Editing by Peter Galloway