CBC/Radio-Canada releases its second quarterly financial report for 2015-2016

November 27, 2015

Key highlights:

  • This quarter, our revenue was higher by $4M (+3%) as we benefited from broadcasting Pan Am and Parapan Am Games. This increase was partly offset by the absence of revenue from 2014 FIFA World Cup Brazil and the Local Programming Improvement Fund, and the adverse effect of the persistent softening of the Canadian TV advertising market.
  • Our expenses were up by $11M (+3%) mainly because this quarter included more rights and production costs associated with providing host broadcasting services for the Pan Am and Parapan Am Games. We continue to make significant progress in reducing our costs, with expenses for ongoing activities $8M less than the second quarter last year.
  • In addition, we also drew down more government funding in the second quarter of 2015-2016 to meet our working capital requirements, resulting in a gain under IFRS and on a Current Operating Basis.

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In the second quarter of this fiscal year, CBC/Radio-Canada continued to increase and deepen its engagement with Canadians through a distinctive content offer on TV, radio and digital platforms, both locally and nationally. “That is the commitment that we have made, and we are staying the course. We are starting to see concrete results from our effort, mainly through our investments in programming” says Judith Purves, Executive Vice-President and Chief Financial Officer.

“We’re working hard to further expand our digital content and local news offer, all the while investing in high-impact Canadian programming. We’re seeing important successes with our Strategy 2020 because of our presence on numerous platforms, where Canadians want to access and engage with content, while also offering distinctive TV and radio Programs,” explains Hubert T. Lacroix, President and CEO.

This quarter, CBC/Radio-Canada offered unprecedented multiplatform coverage of the TORONTO 2015 Pan Am/Parapan Am Games, something that could not have been achieved by relying on TV broadcast alone. The same is true for local news: we have adjusted the length of TV supper-hour news shows to offer sustained local news updates in the evenings and mobile content all day, making our local news closer and more relevant – engaging Canadians all day, on all the platforms they’re using.

The 42nd federal general election and the campaign leading up to it set the stage for CBC/Radio-Canada’s enhanced digital news coverage in addition to its traditional television and radio offerings, with both CBC and Radio-Canada setting record audience numbers, with over 8.6 million Canadians used our CBC and Radio-Canada online services on election night. “These are only a few examples of how we’re able to increase our coverage of important events, tell the stories that matter most to Canadians, and help them connect and exchange with each other,” concludes Lacroix.

For more information, please read our second quarterly report for 2015-2016.

RECONCILIATION OF RESULTS ON A CURRENT OPERATING BASIS:

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CBC/Radio-Canada defines Results on a Current Operating Basis as Net Results under IFRS less the adjustments for non-cash expenses that will not require operating funds within one year and non-cash revenues that will not generate operating funds within one year. This measure is used regularly by management to help monitor performance and balance the Corporation’s budget consistent with parliamentary appropriations. We believe this measure provides useful complementary information to readers, while recognizing that it does not have a standard meaning under IFRS and will not likely be comparable to measures presented by other companies.

Adjustments include the elimination of non-cash pension and other employee future benefit costs, which represent the excess of the IFRS expense over the actual cash contribution for the year. Adjustments are also made for other non-cash items such as the depreciation, amortization and decommissioning of capital assets; the amortization of deferred capital funding; and non-budgetary annual leave. Other less significant items not funded or generating funds in the current period, primarily employee-benefit-related, are adjusted for in the reconciliation to Results on a Current Operating Basis.

Results on a Current Operating Basis amounted to $18.3 million this quarter, an increase of $73.8 million when compared to the same period last year. This increase primarily reflected higher government funding recognized in income this quarter, as our working capital requirements were higher compared to last year when we sold a portion of our equity interest in Sirius XM Canada Holdings (SiriusXM). Last year, our year-to-date loss on a Current Operating Basis mainly reflected timing differences in the recognition of government funding into income. This year, our year-to-date loss reflects additional investments in our strategic priorities.

LOOKING FORWARD

In our next quarterly financial report, we’ll be further exploring the Corporation’s 2015-16 season launch as well as our first set of results for our conventional TV and Radio performance indicators.

About CBC/Radio-Canada

CBC/Radio-Canada is Canada’s national public broadcaster and one of its largest cultural institutions. The Corporation is a leader in reaching Canadians on new platforms and delivers a comprehensive range of radio, television, internet, and satellite-based services. Deeply rooted in the regions, CBC/Radio-Canada is the only domestic broadcaster to offer diverse regional and cultural perspectives in English, French and eight Aboriginal languages.

A space for us all is CBC/Radio-Canada’s strategy to transform the public broadcaster, and ensure that it continues to fulfill its mandate for Canadians, now and for future generations. Through to 2020, the Corporation will increase its investment in prime-time television programming and continue to create radio programs of the highest quality, while promoting the development of digital and mobile platforms and content.

Follow us on Twitter @CBCRadioCanada.

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