TVA Group magazine division revenue was up but company takes $40 million write down

Quebecor Media's TVA Group has recorded a goodwill impairment charge against its magazine division of about $40 million for the first nine months of 2016. The company had an adjusted operating income of $5.7 million in the magazines segment, a $1.9 million (49%) improvement "mainly reflecting operational synergies realized since the integration of the magazines acquired from Transcontinental and other cost-cutting initiatives."

"While we recorded an increase in adjusted operating income in the magazines segment, the continuing downward trend in the magazines industry's operating revenues, particularly advertising revenues and newsstand sales, led the Corporation to conclude that a $40.1 million non-cash charge for impairment of goodwill had to be taken," said Julie Tremblay, president and chief executive officer said in a release.

TVA Group is, in addition to being the leading publisher of French-language magazines and a leader in publishing English language titles, is involved in broadcasting, film and audiovisual production. 

TVA announced a net loss attributable to shareholders of $32.5 million, or a loss of $0.75 per share, in the third quarter, compared with a net loss attributable to shareholders of $36.5 million, or a loss of $0.84 per share, in the same quarter of 2015. (Most of the losses were attributed by the company to the broadcasting and production segment -- particularly "a decrease in the adjusted operating income of TVA Network and the "TVA Sports" channel, which was affected by the concentration of costs related to broadcasting the World Cup of Hockey in September 2016" -- and film production and audiovisual divisions.) 

This was the year (in April) during which TVA Group acquired 14 magazines from Transcontinental Inc., four of which are owned and operated in partnership, as well as three websites, custom publishing contracts and book publishing operations, for a purchase price of $56,286,000 in cash. It transferred the acquired book publishing operations to Sogides Group Inc., a corporation it controls, for $720,000. 

3Q revenue for the magazine division was $30 million; for the first nine months, $86.7 million. Adjusted operating revenue for the magazine division was $5.7 million for Q3 (compared with $3.8 million in the same period in 2015) and $11.7 million for the first nine months ($6 million.)