Canadian media group Quebecor (TSX:QBR.B) Tuesday posted a 29 per cent drop in profits as it took a goodwill impairment charge in the third quarter.
Net income fell to $18.6 million, or 30 cents per share, from $26.1 million, or 40 cents a year earlier.
The company took a $187 million charge for impairment of goodwill. It also reported a gain of $117.7 million on the valuation of financial instruments. Adjusted income rose to $52.1 million, or 83 cents from $40 million, or 63 cents a year earlier.
Revenue rose 4 per cent to $1.06 billion.
“The Corporation continued its growth in the third quarter of 2012 despite a fiercely competitive business environment in most of its lines of business,” said Quebecor’s president and CEO Pierre Karl Péladeau.
Revenue at Quebecor’s telecommunications business – Videotron – rose 8 per cent to $659.2 million.
The company’s Videotron business offers cable television, Internet and telephone services mainly in Quebec. Its Sun Media division publishes newspapers across Canada.
Videotron president and CEO Robert Dépatie said: “We are very satisfied with the growth recorded by Videotron in the third quarter of 2012.”
“Revenues from Videotron’s main services were all up substantially, enhancing the Telecommunications segment’s operating income by $34.5 million, a significant 12.5% increase.
“Videotron recorded a net increase of 101,100 revenue generating units and a 7.7% increase in average monthly revenue per user compared with the same period of the previous year.”
Quebecor’s other businesses include the Sun TV television network, French and English-language magazines, and a group of French-language publishers.
The Quebec-based media company said it expects annual savings of $45 million from a new operational and management approach at its newspaper publishing arm.
As part of the restructuring, Sun Media has closed two Ontario-based publishing facilities and cut 500 jobs.
Quebecor was one of the media companies that had successfully argued that BCE’s (TSE:BCE) proposed takeover of rival Astral Media (TSE:ACM.A) would give BCE too much market power. Canada’s broadcast regulator blocked the takeover in October.
BCE has extended the closing date of the deal as it works to overturn the ruling.
In October, Quebecor bought back a substantial interest in its media arm from the Caisse de depot et placement du Quebec in a transaction valued at $1.5 billion.
Under the deal, which involves the buyback of some 30.5 million shares, the Caisse’s interest in Quebecor Media is being reduced to 24.6 per cent from 45.3 per cent.