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Corus posts sharp profit drop, revenue slides

The Corus building sits at the foot of Sherbourne Street along the Toronto.

Sarah Dea/The Globe and Mail

Corus Entertainment Inc. is reporting a big drop in second-quarter net income, citing a $25-million pre-tax debt refinancing charge as well as "soft" business results that saw a double-digit slide in its quarterly revenue.

Toronto-based Corus said Thursday that net income attributable to shareholders fell to $5.9-million or seven cents per diluted share in the three months ended Feb. 28. That was down from $31.6-million on 38 cents in the 2012 period that ended Feb. 29.

Corus said that removing the impact of the debt refinancing charge, adjusted net income attributable to shareholders in the quarter was $24.4-million, or 29 cents per diluted share – down from $31.6-million a year before.

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Revenue totalled $183.7-million, down 11 per cent from $205.7-million in the year-earlier period, with both its television and radio segments showing declines..

"The second-quarter business results were soft, as expected, but we were able to end the first half of the year with significant increases in year-to-date free cash flow and improved margins," president and CEO John Cassaday said in remarks accompanying the results.

"The highlight of the quarter was the successful refinancing of our senior unsecured guaranteed notes, which resulted in a 300 basis point reduction in our financing costs."

Last month, after the second quarter closed, Corus signed a deal to buy the 50-per-cent ownership interest in Teletoon and two Ottawa-based radio stations, CKQB-FM and CJOT-FM that it does not already own from BCE Inc. as part of that company's deal to acquire Astral Media Inc.

Corus also agreed with Bell and Shaw Media to buy each of their respective 50-per-cent interests in the French-language specialty channels Historia and Series+.

Separately, the company also signed a deal with Shaw Media to buy the remaining 49-per-cent stake in ABC Spark. As part of the agreement, Corus will sell its 20 per cent stake in Food Network Canada to Shaw Media.

Corus operates specialty television channels and radio stations. It's also active in children's book publishing, children's animation and animation software.

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