TORONTO -- The owner of Canada's largest group of newspapers earned $700,000 in net profits in its second quarter, an improvement from the same time a year before despite a 21-per-cent revenue decline.

Toronto-based Postmedia Network Canada Corp., publisher of the National Post and other daily newspapers, said Thursday its revenue for the three months ended Feb. 28 was $106 million, down from $134.2 million a year earlier -- before the economic impact of COVID-19 was a major factor.

Postmedia's second-quarter profit for this financial year was equal to one cent per share and compared with a year-earlier net loss of $12.8 million or 14 cents per share.

The company said the change was primarily due to gains on derivative financial instruments and foreign exchange, higher operating income and lower expenses, partially offset by a $7 million impairment expense.

Included in the quarter was $5.7 million from the federal government's COVID-related emergency wage subsidy program, which reduced employee compensation expenses. The quarter also included $1 million from federal and Quebec journalism tax credits, which are applied to the salaries of journalists.

The revenue decline was attributable to a 29 per cent decrease in print advertising, 21 per cent drop in digital revenue and an 11.6 per cent fall in print circulation revenue.

At the same time, it cut operating expenses by nearly 20 per cent that is expected to save about $5 million per year.

"Our second quarter represents continued progress on our strategy with measured optimism for the future," CEO Andrew MacLeod said in a statement accompanying the results.

Postmedia said it will reduce debt by $17 million by the end of May, resulting in a decrease of more than 70 per cent of its first lien debt to $67 million from $225 million since its 2016 recapitalization.