August 11, 2010 / 11:51 AM / in 8 years

UPDATE 1-Canada's FP Newspapers Income Fund Q2 profit falls

* Q2 EPS C$0.297/unit vs C$0.315/unit

* Revenue at FPLP falls 3 pct

Aug 11 (Reuters) - FP Newspapers Income Fund FP_u.TO posted a lower second-quarter profit, hurt by costs associated with its plan to convert to a corporation, but said it is seeing a slight improvement in the advertising revenue trend.

The fund, which holds a 49 percent stake in FP Canadian Newspapers Limited Partnership (FPLP), posted net earnings of C$2 million, or 29.7 Canadian cents a unit, down from C$2.2 million, or 31.5 Canadian cents a unit, last year.

Revenue at FPLP, which publishes Winnipeg Free Press and Brandon Sun daily newspapers, fell 3 percent to C$28.9 million in the quarter.

Revenue from display advertising including color rose 4 percent to C$12.5 million, helped by increased spending in the national automotive category.

Unit holders of the fund approved the company’s plan to convert to a corporation on May 5. The company said costs associated with the plan totalled C$200,000.

The fund added that if there are no further price increases in newsprint for the rest of the year, the third and fourth quarters will see prices at a roughly 2 percent higher level than last year.

Lower delivery expenses will continue throughout the third and fourth quarters, the company added.

Units of the fund closed at C$5 Tuesday on the Toronto Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Don Sebastian)

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