YEAR IN REVIEW – OUR RESULTS
SEASONALITY AND QUARTERLY FINANCIAL INFORMATION
The following table shows condensed financial data for the previous eight quarters. This quarterly information is unaudited, but has been prepared on the same basis as the annual Consolidated Financial Statements. We discuss the factors that caused our results to vary over the past eight quarters in the next section.
|For the year ended March 31, 2018|
|Results before other gains and losses||(43,280)||22,359||(14,787)||(14,364)|
|Other gains and losses||53,658||(8,062)||577||(8,665)|
|Net results under IFRS for the period||10,378||14,297||(14,210)||(23,029)|
|Results on a Current Operating Basis||31,419||13,783||11,379||(7,887)|
|For the year ended March 31, 2017|
|Results before other gains and losses||(16,539)||2,602||(18,310)||(36,159)|
|Other gains and losses||(1,402)||(719)||(93)||(148)|
|Net results under IFRS for the period||(17,941)||1,883||(18,403)||(36,307)|
|Results on a Current Operating Basis||(7,489)||2,018||8,757||(25,557)|
Our operating results are subject to seasonal fluctuations that materially impact quarter-to-quarter operating results.
The seasonality of our revenue is reflective of general market, economic and viewership patterns affecting all conventional broadcasters. Revenue from our ongoing activities generated during the second quarter of the year is usually at its lowest level because the summer season attracts fewer viewers. In contrast, revenue from our ongoing activities in the third quarter is comparably higher as audiences are larger and more advertisers purchase airtime in anticipation of the holiday season.
Government funding is recognized in the Corporation’s income based on budgeted net expenses for the quarter. Monthly and quarterly budgets are established from the annual budget approved by the Board of Directors at the beginning of each year and reflect expected funding for the year and seasonal impacts on expenditures and self-generated revenue.
Expenses from our ongoing activities also tend to follow a seasonal pattern because they are influenced by the programming schedule. Operating costs tend to be higher in the fourth quarter as the Corporation incurs costs preparing for the fall broadcasting season and completes project deliverables due by the end of the fiscal year.
Other factors may impact net results from quarter to quarter. These may include foreign exchange gains or losses, changes to the fair value of derivative financial instruments, asset write-offs and sales. When appropriate, these are recorded as other gains and losses.
COMPARISON OF 2017-2018 AND 2016-2017 BY QUARTER
Lower revenue compared to the same period in the prior year, primarily from the combined effect of lower content sales and lower subscription revenue on our speciality platforms.
These decreases were partly mitigated by growth in our advertising revenue from our conventional television, mostly on ICI RADIO-CANADA TÉLÉ, and higher digital revenue.
Expenses are higher relative to the same period last year, in line with our plans to broadcast additional original content across our platforms. In particular, we aired more original Arts and Entertainment programming, invested in various Canada 150 initiatives, and continued building our digital capabilities.
Second quarter revenue in 2017-2018 was lower compared to the same period in 2016-2017, primarily because last year includes revenue from broadcasting the Rio 2016 Olympic Games.
This overall decrease was partly offset by higher revenue from our ongoing activities, mostly driven by strong audience performance on Radio-Canada and growth in our digital advertising.
Expenses in the second quarter of 2017-2018 were lower than in the same period last year, primarily because last year includes event costs for broadcasting the Rio 2016 Olympic Games.
This decrease was partly offset by an increase in our ongoing expenses as we broadcast more original content across our platforms during the summer. In particular, we aired more original Arts and Entertainment programming, covered Canada 150 events, and continued investing in our digital capabilities and local services.
Third quarter revenue was higher this year, mostly driven by higher Radio-Canada advertising revenue on all platforms.
This growth is partly offset by lower subscriber fees as Canadians continue to reduce their subscription packages (cord-shaving trend).
Third quarter expenses in 2017-2018 were higher as we continued to broadcast more original content across our platforms. In particular, we aired more original Arts and Entertainment programming and provided more local services. In addition, we continued our investment in our digital capabilities.
Higher revenue compared to the same period last year, mainly due to our broadcast of the PyeongChang 2018 Olympic Winter Games.
Higher expenses compared to last year due to our broadcast rights and production costs for the PyeongChang 2018 Olympic Winter Games.
STRATEGY 2020 PERFORMANCE METRICS
|FINANCIAL INDICATOR||Result 2016-2017||Target 2017-2018||Result 2017-2018||Performance against target||Target 2018-2019||Target 2020|
|Achieve cost reduction target ($ million)||$87.5||$93.1||$93.1||$104.0||$106.31|
1 Target updated to reflect the continuation of our broadcasting of Hockey Night in Canada on Saturday night and playoff hockey beyond 2020.