Revenues for the first quarter of 2015 increased 1.1%, from $499.3 million to $504.6 million. This increase is mainly attributable to the contribution from acquisitions, more specifically the acquisition of Capri Packaging and the Quebec weekly newspapers from Sun Media Corporation. New printing and distribution agreements signed in 2014 also contributed to the increase in revenues.
This growth in revenues was mitigated by disposals and closures, namely the sale of Rastar’s assets, a reduction in marketing products printing activities, a transitional slowdown in flyer printing activities in the U.S. and, to a lesser extent, in Canada, and challenging market conditions for advertising spending.
“With the results for the first quarter of fiscal 2015, namely the 1.1% growth in consolidated revenues and the 36.7% increase in our profitability, the year is off to a good start,” said François Olivier, president and CEO of TC Transcontinental. “Our strategy aimed at consolidating the weekly newspaper market in Quebec and diversifying into flexible packaging has been fruitful. The integration of Transcontinental Capri was successfully completed, and this asset is performing as expected. Despite lower advertising revenues, our various initiatives allowed us to be profitable and to keep generating significant cash flows. We maintain an excellent financial position, which permits us, once again this year, to increase the dividend per participating share.”
“In the coming quarters, we intend to continue growing our flexible packaging business, optimizing our operating activities as well as investing in our digital offering,” concluded Olivier.
In the first quarter of 2015, adjusted operating earnings rose 21.6%, from $43.5 million to $52.9 million. On the one hand, this performance is due to the contribution from acquisitions, disposals and closures as well as the favorable impact of the US dollar versus the Canadian dollar. On the other hand, this increase stems from the new printing and distribution agreements and the cost-reduction initiatives in the Media Sector. However, this growth was partly offset by the above-mentioned lower advertising revenues and the variation in the stock-based compensation expense.
Adjusted net earnings applicable to participating shares grew 36.7%, from $26.4 million to $36.1 million. On a per share basis, it increased from $0.34 to $0.46. Net earnings applicable to participating shares more than doubled, from $17.2 million, or $0.22 per share, to $37.9 million, or $0.49 per share. This improvement results mostly from the increase in operating earnings before amortization compared to the first quarter of 2014.