Revenues Down, Profit Margins Up For Private Radio In 2015

Operating revenues for the private radio broadcasting sector edged down 0.5%  (-$7.8 million) from 2014 to $1.6 billion in 2015, according to new data supplied by Statistics Canada. This was the second consecutive annual decrease.

The profit margin before interest and taxes rose 0.4 percentage points from 18.6% in 2014 to 19.0% in 2015, with profits before interest and taxes totalling $304.6 million. This increase stemmed from a 0.9% decrease in operating expenses to $1.3 billion, which was attributable to a 5.5% drop in administrative expenses.

In 2015, 98.4% of total operating revenues for private radio broadcasting were generated from the sale of advertising, with sales of local advertising totalling $1.1 billion. Local advertising represented 66.7% of total operating revenues, down 1.0 percentage point from 2014, while national and network advertising accounted for 31.7%, up 0.9 percentage points.

Profit margin stable across provinces

In 2015, the Atlantic provinces posted the strongest increase in profit margins before interest and taxes compared with 2014. These provinces, along with Saskatchewan, were the only ones to record growth of 1.0 percentage point or higher. In 2015, the profit margin before interest and taxes for the Atlantic provinces was 16.8%, up 1.7 percentage points. Saskatchewan's profit margin before interest and taxes was 10.4%, an increase of 1.0 percentage point.

The private radio broadcasting sector in Quebec recorded a slight increase in profit margin before interest and taxes, up from 18.2% to 18.3% in 2015, with profits before interest and taxes totalling $56.3 million.

Private radio broadcasters in Alberta were the most profitable in the country in 2015, with a profit margin before interest and taxes of 22.5%, edging up 0.3 percentage points from 22.2% in 2014.

Ontario ranked second in total profitability in 2015. The province's private broadcasters registered a profit margin before interest and taxes of 22.0%, slightly higher than 21.7% in 2014.

In Manitoba, the profit margin before interest and taxes rose 0.1 percentage points from 11.8% in 2014 to 11.9% in 2015. The increase in the profit margin before interest and taxes in Manitoba was due to a $764,000 increase in operating revenues, as operating expenses rose $632,000.

In British Columbia and the territories, a 1.0% decrease in operating expenses led to an increase in the profit margin before interest and taxes, which rose from 13.7% in 2014 to 13.8% in 2015.

Increase in profit margin before interest and taxes for private AM radio sector

The profit margin before interest and taxes for the private AM radio sector increased from 4.6% in 2014 to 6.0% in 2015, as a result of a notable decrease in operating expenses, which were down 3.1% to $268.7 million in 2015. Operating revenues declined 1.7% to $285.8 million. The number of AM stations fell by 3 from 2014 to 123 in 2015.

In the private FM radio sector, operating revenues edged down 0.2% to $1.3 billion in 2015. The profit margin before interest and taxes was up slightly from 21.7% in 2014 to 21.8%, with profits before interest and taxes totalling $287.4 million.

Operating revenues up for ethnic radio stations

The operating revenues for ethnic radio stations increased 1.9% to $49.5 million in 2015. However, their profit margin before interest and taxes fell from 14.9% in 2014 to 14.5% in 2015, as a result of a 2.5% increase in operating expenses.

English-language radio stations recorded a 0.5% decrease in operating revenues to $1.3 billion in 2015. However, their profit margin before interest and taxes rose from 19.1% in 2014 to 19.6% in 2015.

The profit margin before interest and taxes for French-language radio stations remained at 16.5% in 2015, as a 1.4% decrease in operating expenses offset a 0.8% decrease in operating revenues.

PDF figures for private broadcaster advertising revenues here, and Profit margin before interest and taxes here.

 

 

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