Transcontinental announced its results for the second quarter of fiscal 2016, which ended April 30, 2016. Revenues increased from $490.5 million to $497.2 million.
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The contribution from the acquisition of Ultra Flex Packaging and the appreciation of the U.S. dollar against the Canadian dollar more than offset the decrease in existing operations.
In the printing division, the contribution of previously announced new contracts and the growth of the in-store marketing product niche were more than offset by the decline in advertising spending in several segments and the loss of a U.S. customer early in 2015.
However, most of the printing volume stemming from Canadian retailers remained relatively stable. The decrease in the packaging division is mainly attributable to the loss of a customer as a result of its sale and to inventory balancing at an important customer.
In the Media Sector, the decline in advertising revenues continued to significantly impact the newspapers in the Local Solutions Group.
Adjusted operating earnings went from $61.6 million to $56.2 million in the second quarter of 2016, a decrease of 8.8%.
The contribution from the acquisition of Ultra Flex Packaging, the favourable exchange rate effect and the optimization of the cost structure in the Media Sector only partially offset the decrease in existing operations and the investments made to increase capacity and support the growth strategy of the packaging division.
Adjusted net earnings attributable to shareholders of the Corporation decreased 12.5%, from $39.1 million, or $0.50 per share, to $34.2 million, or $0.44 per share. This decrease is mainly due to lower adjusted operating earnings. Net earnings attributable to shareholders of the Corporation went from $81.2 million, or $1.04 per share, to $5.4 million, or $0.07 per share.
This decrease is attributable to several unusual items totalling more than $80 million, including the gain on the sale of the consumer magazine publishing activities and the reversal of the provision for multi-employer pension plans in the second quarter of 2015, as well as the asset impairment charge related to the newspapers in the Atlantic provinces in the second quarter of 2016. ■