UPDATE 1-Weak print sales dent Yellow Media profit yet again

Tue Feb 5, 2013 8:43am EST

* Fourth-qtr adj EPS C$0.70 vs C$1.53 year ago

* Total revenue falls 16 pct

* Online revenue rises 11 pct

Feb 5 (Reuters) - Canadian telephone directory publisher Yellow Media Ltd's fourth-quarter adjusted profit halved as the company failed to replace fast-dwindling print revenue with online sales.

Debt-laden Yellow Media has been looking to transform itself into a digital company from a print-oriented business as it struggles to sell advertising space in its traditional Yellow Pages and directories.

Online revenue, which accounted for about 38 percent of the total revenue in the fourth quarter, rose 11 percent. But that was not enough to offset declines in print revenue.

Total revenue fell 16 percent to C$264.4 million ($264.7 million).

"This trend was expected, and we do not anticipate it to reverse in the near future," Chief Executive Marc Tellier said in a statement.

Directory publishers such as Yellow Media and the UK-based Hibu Plc, formerly Yell Group, are turning digital as more users switch to online search engines like Google Inc to find local listings.

Yellow Media in December approved a recapitalization plan that would reduce it debt by about C$1.5 billion. The company had long-term debt of C$1.78 billion as of Sept. 30.

Yellow Media said on Tuesday it had about C$782 million of net debt as of Dec. 31.

After the recapitalization, the company changed its name to Yellow Media Ltd and re-listed its shares on the Toronto Stock Exchange under the ticker symbol "Y".

Yellow Media, with a market value of C$226 million, published its first directory in 1908. The company is the official directory publisher for Bell Canada and Telus Corp .

ADJUSTED PROFIT HALVES

After adjusting for an impairment charge of C$300 million and a gain on settlement of debt, the company earned C$24.0 million, or 70 Canadian cents per share in the quarter, compared with net income from continuing operations of C$48.2 million, or C$1.53 per share, a year earlier.

Net profit from continuing operations for the quarter ended Dec. 31 was C$823.5 million, or C$29.30 per basic share.

Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Yellow Media Inc to 'D' from 'CC' in December.

Shares of the Montreal-based company closed at C$7.77 on Monday on the Toronto Stock Exchange.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.