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Jun 29, 2022

Corus CEO says company's portfolio designed to withstand recessionary pressures

It's a volatile time for TV advertising revenue: Corus Entertainment CEO

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Corus Entertainment Inc.'s chief executive said Wednesday that a recession is something he is "confident" the company can manage through.

"I do believe that we've put together a portfolio of businesses that (is) designed to be more resilient to withstand potential recessionary pressures," Corus CEO Doug Murphy said on an earnings call with analysts.

The media and entertainment company has levers it can pull to manage its cost structure in the event of a recession, he explained, like adjusting the timing of content being aired and being more disciplined around expenses.

"It's a balancing act," he said. "If there's no demand, we're not going to build supply."

This commentary comes as Corus gears up to launch Pluto TV in Canada this fall in partnership with Paramount Global, part of its broader strategy to expand its digital, streaming and content offerings, which includes Stack TV, the Global TV app, Corus Studios, and a U.S. output deal with Hulu. Pluto TV is free and ad-supported, and will offer over 20,000 hours of content.

Corus reported Wednesday that its third-quarter profit fell compared with a year ago as its revenue grew eight per cent.

Its net income attributable to shareholders totalled $29.6 million or 14 cents per diluted share for the quarter ending May 31, down from $40.7 million or 19 cents per diluted share a year earlier.

Revenue for the three-month period totalled $433.5 million, up from $402.3 million.

The increase came as revenue at the company's television business rose to $404.1 million compared with $379.8 million a year ago.

Radio revenue at Corus totalled $29.3 million for the quarter, up from $23.2 million in the same quarter last year.

Murphy said the company's portfolio of businesses is producing growth on all fronts, delivering strong consolidated revenue gains for the fifth consecutive quarter.

Corus noted that the advertising market environment remains uncertain amid inflationary challenges, rising interest rates, a post-pandemic new normal, and the war in Ukraine. But the company is "cautiously optimistic" moving into the fall, which is considered an important period for television and advertisers as demand for content typically increases.

Corus shares lost 31 cents or 7.8 per cent to close at $3.67 in trading on the Toronto Stock Exchange.