8 June 2010
Transcontinental reports stronger profitability
MONTRÉAL—Transcontinental says it's achieved stronger profitability for the fourth straight quarter, according to its financial report for the second quarter of 2010, ended April 30.

The company announced operating income growth of 18%, from $77 million to $91 million before amortization compared to second quarter 2009 despite a 4% decrease in revenues. Transcontinental reported revenues for the quarter of $510 million, compared with $530 million at the same time last year. Excluding divestitures of publications, plant closures, the paper effect and the exchange rate effect, revenues were up 2%, the company says.

The increase in operating income stems mainly from the cost reduction measures implemented in fiscal 2009, improved equipment productivity, and the company’s contract to print the San Francisco Chronicle.

Transcontinental also noted it had concluded the sale of almost all its direct mail assets in the United States to IWCO Direct, for net proceeds of $105.7 million during the second quarter.

The report noted Transcontinental is increasing its market share in newspaper and flyer printing. In recent months the company has added several new customers to its Canada-wide flyer printing and distribution network. The company is also developing a hybrid platform to print newspapers and flyers, part of  a $1.7 billion, 18-year contract with The Globe and Mail. The platform will be operational before the end of 2010.
 

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