The province's largest newspaper publisher has been pursuing new revenue-generating opportunities, including real estate, in the wake of a recent decline in traditional newspaper revenue.
FP Canadian Newspapers Limited Partnership (FPLP), which owns the Winnipeg Free Press, Brandon Sun and nine community and special-interest newspapers, reported on Tuesday an 8.7 per cent decline in revenues for the first three months of this year.
That led to a 41.7 per cent drop in net earnings -- $1.7 million versus $2.9 million in the first quarter of 2013 -- and a 29.5 per cent decline in EBITDA (earnings before interest, taxes, depreciation and amortization -- $3.1 million versus $4.4 million.
FP Newspapers Inc. (FPI) -- the publicly traded company that owns securities entitling it to 49 per cent of the distributable cash of FPLP -- also saw its net earnings drop to $500,000, or 7.9 cents per share, from $1 million, or 14.1 cents per share a year earlier.
"It's a challenging business," FPI chairman Ron Stern told the company's annual shareholders meeting in Winnipeg. "But I think we still have a very good business... as long as we manage it smartly and decisively, and that is what we are going to be doing to the best of our ability."
Free Press publisher Bob Cox said that includes further reducing operating costs and developing new sources of revenue. He noted the Free Press has rented out office space in its Mountain Avenue building to two outside tenants -- a local development corporation and a customs brokerage firm -- and has more space to rent out if additional tenants can be found.
The company also recently installed ultraviolet ink-processing equipment at its Derksen Printing facility in Steinbach that will enable it to compete for commercial printing contracts, Cox said. Later this year or early next year it will introduce a user-pay system for the online version of the Free Press.
"We're one of the last ones that haven't done this," he said. "I don't think there is another big-city paper that hasn't done it."
On the cost-reduction side, FPLP said it is reviewing operating costs in all of its business units. Cox also said the Free Press won't replace most of the two dozen employees who have retired since last summer, or have announced their intention to retire.
He said the unusually long, cold winter was hard on the retail and newspaper industries because it discouraged consumers from going out and spending money, which in turn led to retailers cutting their newspaper ads.
FPLP saw its print advertising revenue drop by 10.9 per cent in the first quarter of the year. It also saw declines of 4.3 per cent in its classified advertising revenue and 5.8 per cent in print circulation revenue. However, commercial printing and digital revenue were up by 3.9 per cent and 8.7 per cent respectively, and flyer distribution revenue was unchanged.
Stern said revenue has rebounded in recent weeks: "May is looking good."
An unusually large volume of FPI shares -- 103,546 -- traded on the Toronto Stock Exchange Tuesday. The share price fell 34 cents, or 6.9 per cent, to close at $4.60.