TORONTO — The CEO of Postmedia Network Canada Corp. said Thursday that he's hopeful that growth in revenue from the publisher's digital products is a sign of a recovery from the worst impact of the pandemic.
"It's still early days but we saw some green shoots in our quarter specific to digital advertising," Postmedia chief executive Andrew MacLeod said in an interview after the newspaper and digital publisher's latest financial report.
He added that Postmedia doesn't expect its legacy businesses to return to sustained growth but it hopes they return to pre-pandemic levels.
Postmedia, which owns the National Post and other print and digital publications, said earlier Thursday it had a $8.7-million net profit during the third quarter ended May 31, compared with a $13.8-million loss a year earlier.
The profit was equal to nine cents per share, compared with a loss of 15 cents for the three months ended May 31, 2020.
Digital revenue for the three months was up $4.7 million or 21.6 per cent to $27 million, partly offsetting declines in advertising and circulation revenue.
Total revenue for the third quarter was $111.7 million, a decline of 0.6 per cent from $112.4 million a year earlier.
Postmedia said the quarter included nearly $8.9 million in gains on foreign currency exchange compared with a $4.6-million loss a year earlier.
The company also said the quarter included steps to reduce costs for compensation, real estate and production that will cut $3 million of expenses on an annualized basis.
However, MacLeod said Canada's publishers need government help to face structural challenges in the industry due to the share of advertising revenue going to international digital giants, such as Google and Facebook.
"These are exceptionally large powerful companies, arguably on an unprecedented scale, that have the ability to negotiate directly with sovereign nations," MacLeod said.
He said the Canadian government should follow an Australian approach that allowed the publishing industry to stand together to negotiate with the international giants.
The Liberal government has promised a number of measures to put more demands on foreign companies doing business in Canada such as Facebook, Google and Netflix.
For example, Netflix and other companies that sell digital products or services to Canadians have been required since July 1 to collect taxes on those purchases — as already required by domestic providers.
However, Bill C-10 — which would amend the Broadcasting Act to cover online streaming platforms — could die if, as widely expected, there's a federal election this year.
This report by The Canadian Press was first published July 8, 2021.
Companies in this story: (TSX:PNC.A, TSX:PNC.B)
David Paddon, The Canadian Press