Cinram International Income Fund (TSX: CRW.UN) today reported its third quarter financial results. The Fund recorded a four per cent increase in revenue to $467.3 million from $450.5 million in 2007. Earnings before interest, taxes and amortization (EBITA(1)) were $59.0 million in 2008, down from $65.8 million the third quarter of 2007. Excluding unusual items, third quarter EBITA was $59.0 million, down from $66.5 million in 2007.
"Cinram's core business has shown resilience in the face of a turbulent macro-economic environment," said Cinram chief executive officer Dave Rubenstein. "During the third quarter, we benefited from strong organic growth in our video game distribution segment and the expansion of our core business in Europe."
The Fund reported net earnings from continuing operations for the third quarter of 2008 of $1.5 million or $0.03 per unit (basic) compared with $34.8 million or $0.60 per unit (basic) in 2007. Since the Fund completed the sale and liquidation of Giant Merchandising's assets and operations during the second quarter of 2008, Giant's results were excluded from Cinram's continuing operations for the three and nine months ended September 30, 2008, and 2007.
For the nine months ended September 30, 2008, Cinram reported an eight per cent increase in revenue to $1,302.1 million from $1,210.3 million in 2007 as a result of increases in revenue attributable to the acquisition of Ditan, the wireless distribution business, the addition of Universal Pictures International Entertainment in Europe and the effects of foreign exchange due to a weaker U.S. dollar for the first nine months of 2008 compared to the same period in 2007.
EBITA for the nine months was $133.5 million compared with $171.7 million in 2007; EBITA excluding unusual items was $137.2 million compared with $174.4 million in 2007. The decline in EBITA was principally the result of lower average selling prices for DVDs, which coupled with volume are the two main drivers of Cinram's profit margins, and transition and start-up costs in our wireless segment in Europe.
On a year-to-date basis, the Fund reported a net loss from continuing operations of $8.8 million or $0.15 (basic) in 2008 compared with a net profit of $17.8 million or $0.31 (basic) in 2007.
The change in net profit for the third quarter and the year to date from 2007 was primarily related to tax recoveries of $26.8 million and $26.6 million, respectively, which were recorded in 2007. -- www.cnxmarketlink.com
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