TORONTO, March 12 (Reuters) - Commercial printer Transcontinental Inc TCLa.TO TCLb.TO swung to a quarterly loss on Thursday as its customers slashed spending amid a “sharp and sudden” recession.
Transcontinental, which said last month it would cut 1,500 jobs, reported a loss of C$6.4 million ($5 million), or 8 Canadian cents per share, in the three months ended Jan. 31. That was down from a profit of C$34.1 million, or 41 Canadian cents per share, in the same period a year earlier.
“We are confronting a situation that Transcontinental has never had to deal with before,” Chief Executive Francois Olivier said in a statement.
Revenue rose to C$604.1 million from C$596 million a year earlier. However, excluding acquisitions, the positive effect of paper prices and exchange rates, revenues fell 10 percent, the company said.
The drop was mainly due to weakness in U.S. direct-mail activities, as well as magazine publishing and the printing of commercial products, the company said.
Montreal-based Transcontinental bills itself as the biggest printer in Canada and the sixth-largest in North America.
Aside from cutting about 10 percent of its workforce, the company has also put in place a hiring freeze, reduced capital investments and is implementing other measures such as unpaid leave and reduced work weeks to cut expenses.
“We are monitoring the situation very closely and will make the necessary adjustments if the situation deteriorates further,” Olivier said.
All told, the actions already announced should reduce costs by about C$75 million annually.
Transcontinental’s class A shares were up 20 Canadian cents at C$6.85 on the Toronto Stock Exchange shortly after the earnings report.
$1=$1.29 Canadian Reporting by Wojtek Dabrowski; editing by Rob Wilson