QM Record profits

Marketwire has the most detailed summary of today's Quebecor Media 2007 performance figures, but in a nutshell, the sun is shining on the media giant.

The financial web site says Quebecor Media's net income totals a record $327.1 million, compared with $169.7 million net loss in 2006, a $496.8 million improvement.

"The newspapers segment's revenues rose by $99.9 million (10.8%) to $1.03 billion in 2007, mainly as a result of the acquisition of Osprey Media," it says.

Good news for shareholders, but no doubt bittersweet for Sun Media newspapers slowly making a comeback in employee numbers following major staff losses early in 2007.

The record profits should be more ammunition in SONG's negotiations for a second contract for Toronto Sun union members, which are ongoing.

As noted here recently, Edmonton Sun's non-union employees received a 4% hike and the Calgary Sun's employees received a 5% pay hike.

But back to the Marketwire report. The following is a recap of the 2007 performance of Quebecor's newspaper segment:

"The Newspapers segment's revenues rose by $99.9 million (10.8%) to $1.03 billion in 2007, mainly as a result of the acquisition of Osprey Media. Excluding the impact of the acquisition, revenues increased by $4.4 million in 2007. Commercial printing and other revenues combined increased by 12.9%. Advertising revenues grew by 1.2% while circulation revenues decreased by 5.8%. The revenues of the urban dailies declined by 1.5% in 2007. Excluding the acquisition of Osprey Media, the revenues of the community newspapers increased by 1.1% in 2007. Within the urban dailies group, revenues of the free dailies increased by 62.7% in 2007 due to excellent results posted by the Montreal, Toronto and Vancouver dailies, and the launch of free dailies in Ottawa and Ottawa-Gatineau in November 2006, and in Calgary and Edmonton in February 2007.

The Newspapers segment's operating income totalled $225.9 million in 2007, an $18.3 million (8.8%) increase. The favourable impact of the acquisition of Osprey Media ($25.3 million) was partially offset by investments and one-time charges, including investments related to the launch of four new free dailies in Ottawa, Ottawa-Gatineau, Calgary and Edmonton and the launch of Quebecor MediaPages, the impact of the labour disputes at Le Journal de Montreal and Le Journal de Quebec in 2006 and 2007 respectively, and variances in the charge for Quebecor Media's stock option plan. Excluding these items, operating income was $225.2 million in 2007, compared with $214.2 million in 2006. The $11.0 million (5.1%) increase mainly reflects lower newsprint costs, the impact of restructuring initiatives and the decrease in operating losses at the free dailies, on a comparable basis (i.e., at the Montreal, Toronto and Vancouver dailies), which were partially offset by costs related to the implementation of certain projects. Operating income from the dailies in the Western Group increased by 13.8%. Osprey Media's operating income increased by 12.6% in 2007, on a comparable basis, testifying to the strategic value of the acquisition for Quebecor Media's Newspapers segment. Excluding the launch of the four new free dailies and the impact on results of the labour disputes at Le Journal de Montreal and Le Journal de Quebec, operating income increased by 5.5% at the urban dailies. Excluding the impact of the acquisition of Osprey Media, operating income increased by 6.3% at the community newspapers.

In the fourth quarter of 2007, the Newspapers segment's revenues increased by $59.8 million (24.2%) to $306.5 million, mainly as a result of the impact of the acquisition of Osprey Media, which closed in August 2007. Excluding the impact of that acquisition, combined revenues from commercial printing and other sources increased by 29.5%, advertising revenues were flat, and circulation revenues decreased by 8.8%.

The Newspapers segment's operating income totalled $76.6 million in the fourth quarter of 2007, a $13.1 million (20.6%) increase attributable primarily to the impact of the acquisition of Osprey Media ($15.9 million). Excluding the acquisition of Osprey Media and investments and one-time charges, including investments related to the launch of four new free dailies (in Ottawa, Ottawa-Gatineau, Calgary and Edmonton) and of Quebecor MediaPages, charges related to Quebecor Media's stock option plan, and the impact of the labour disputes at Le Journal de Montreal and Le Journal de Quebec in 2006 and 2007 respectively, operating income was $70.1 million in the fourth quarter of 2007, compared with $66.7 million in the same quarter of 2006. The $3.4 million (5.1%) increase was essentially due to the decrease in newsprint costs. Despite the labour dispute at Le Journal de Quebec, operating income increased by 6.9% in the fourth quarter of 2007, compared with the same period of 2006.

Quebecor Media announced on October 11, 2007 the creation of a new subsidiary, Quebecor MediaPages, to consolidate all its print and online directory operations. Quebecor MediaPages plans to launch 30 new local directories under the MediaPages name in Quebec, Ontario and Alberta in 2007 and 2008."