January 14, 2009 / 12:47 PM / in 9 years

UPDATE 2-Canwest warns of possible credit trouble

(Adds details)

* Canwest CGS.TO says may not meet credit covenants

* Reports Q1 loss of C$0.18 cents a share

* Adjusted share profit of C$0.15

* Revenue rose 2 pct to C$886 million

TORONTO, Jan 14 (Reuters) - Canwest Global Communications Corp CGS.TO warned on Wednesday it may fall short of certain financial covenants in its credit facilities, due to the weak economy.

“Based upon current revenue and expense projections, the company may not be able to comply with its existing quarterly total financial leverage ratio covenants in fiscal 2009,” Canwest said in a release.

“The company is reviewing and implementing strategies to ensure compliance with its covenants, including strategies intended to improve profitability and reduce debt.”

Canwest posted a quarterly loss on Wednesday, hurt by the slower economy and lower advertising volume, which dragged on results, the company said.

Canwest posted a loss of C$33 million ($27 million), or 18 Canadian cents a share, in the three months ended Nov. 30. That compared to a profit of C$41 million, or 23 cents a share a year earlier.

Adjusted to exclude gains or losses from interest swaps, foreign exchange, restructuring, and other expenses, the company earned C$27 million, or 15 Canadian cents a share.

The company’s revenue rose 2 percent to C$886 million from C$867 million a year earlier.

Canwest expects advertising revenues will continue to be hurt by uncertain economic conditions. It expects growth in specialty channels and digital sectors while conventional advertising and publishing will be at levels below last year.

Canwest owns daily newspapers in every large urban market in Canada, as well as the Global television network. It also has TV operations in Australia through Network Ten. ($1=$1.22 Canadian) (Reporting by John McCrank, editing by Gerald E. McCormick and Derek Caney)

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