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Corus Entertainment Inc (CJREF)
:CJREF
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Positive Factors
Credit Facility Amendment
The amendment to the bank credit agreement gives management some space to carve out a strategy and potentially stabilize operations.
Network Transition
The transition to new Home and Flavour networks appears successful, ranking #1 and #2 in specialty lifestyle, which could help moderate subscriber declines.
TV Ratings
Early positive signs in TV indicate that conventional ratings are strong, with advertising declines moderating and Global’s overall audience up 11% year over year.
Negative Factors
Balance Sheet Leverage
With balance sheet leverage at 4.48x net debt/LTM EBITDA, there is little prospect for a positive valuation for the equity.
Debt Load
The company has maintained a SELL rating due to the substantial debt load and continuing challenges in the advertising market.
Financial Performance
Corus reported Q2/25 results with revenues down 10% year over year and adjusted EBITDA down 67%, reflecting a continued weak ad environment.
Corus Entertainment (CJREF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.56M
Dividend YieldN/A
Average Volume (3M)1.62K
Price to Earnings (P/E)―
Beta (1Y)1.08
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees2,610
SectorCommunication Services
Sector Strength88
IndustryEntertainment
Share Statistics
EPS (TTM)-0.15
Shares Outstanding196,074,770
10 Day Avg. Volume1,237
30 Day Avg. Volume1,622
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)-0.05
Price to Sales (P/S)0.00
P/FCF Ratio0.24
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$0.15Price Target Upside114.29% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering2
Corus Entertainment Business Overview & Revenue Model
Company DescriptionCorus Entertainment Inc., a media and content company, operates specialty and conventional television networks, and radio stations in Canada and internationally. It operates in two segments, Television and Radio. The Television segment operates 33 specialty television networks and 15 conventional television stations. It is also involved in the production and distribution of films and television programs, and animation software; and merchandise licensing and book publishing activities. In addition, this segment provides social digital agency and social influencer network, as well as media and technology services. Its primary brands include Global Television, W Network, OWN: Oprah Winfrey Network Canada, HGTV Canada, Food Network Canada, History, Showcase, Adult Swim, National Geographic, Disney Channel Canada, YTV, and Nickelodeon Canada. The Radio segment operates 39 radio stations that include a network of news-talk radio stations, as well as classic rock, country, new rock, and contemporary music formats. The company also provides children's animated content and related consumer products under the Babar, Franklin, Max & Ruby, Hardy Boys, Agent Binky: Pets of the Universe, and Esme and Roy brands; Toon Boom, a digital content and animation creation software; and Kids Can Press, a children's publishing press. Corus Entertainment Inc. was incorporated in 1998 and is headquartered in Toronto, Canada.
How the Company Makes Money
Corus Entertainment Earnings Call Summary
Earnings Call Date:Apr 11, 2025
(Q2-2025)
| % Change Since: -12.50%|
Next Earnings Date:Jun 25, 2025
Earnings Call Sentiment Neutral
The earnings call presented both positive and negative aspects of Corus Entertainment's performance. While there were notable achievements such as the successful amendment of the credit facility, growth in Global News viewership, and the strong performance of new networks, there were significant challenges including a decline in consolidated revenue, reduced TV segment profit, and industry-wide advertising difficulties. The overall sentiment leans towards a mixed perspective with challenges offsetting some of the positive developments.Q2-2025 Updates
Positive Updates
Amended and Extended Credit Facility
Corus Entertainment completed a transaction to amend and extend their credit facility, providing improved terms and financial flexibility. The updated credit facility includes a total debt to cash flow ratio of 9.5 times to one through December 31, 2025, an extension of the maturity date to March 20, 2027, and increased access to up to $75 million of revolving credit.
Growth in Global News Viewership
Global News has experienced a 12% growth in total minutes viewed across both broadcast and streaming platforms. Linear TV viewership increased by 11% and digital viewership by 18%, with Global National being the number one national news broadcast in Canada.
Strong Performance of New Networks
Home and Flavor Networks have become the number one and number two specialty lifestyle networks in Canada, outperforming legacy networks in terms of ratings. Almost 11 million Canadians have tuned into their programming.
Increase in Free Cash Flow
Free cash flow increased by 40% to $46 million in the quarter, exceeding expectations due to higher working capital contribution, lower net program rights, reduced cash taxes, and effective cost management.
Negative Updates
Decline in Consolidated Revenue
Consolidated revenue decreased by 10% to $270 million in the quarter, driven by lower television advertising demand and a 5% decline in subscription revenue.
Decrease in TV Segment Profit
TV segment profit was down $36 million in the second quarter, with profit margins dropping to 9% from 21% in the prior period. This was due to lower advertising demand and increased amortization of program rights.
Industry-Wide Advertising Challenges
There is an oversupply of digital advertising inventory and lower demand for traditional television advertising. This has been exacerbated by potential economic impacts from US tariffs.
Radio Revenue Decline
Radio segment revenue decreased by 14% due to lower advertising demand and sector-wide audience declines. Although segment profit increased due to cost containment measures, the overall revenue trend remains negative.
Company Guidance
During the Q2 2025 earnings call for Corus Entertainment, significant guidance was provided on the company's financial strategies and market performance. The call highlighted the completion of a transaction that amended and extended Corus's credit facility, establishing improved terms such as a total debt to cash flow ratio of 9.5:1 through December 31, 2025, and the extension of the maturity date to March 20, 2027. The facility now includes access to up to $75 million of revolving credit at a fixed interest rate of 7.29%, compared to the previous floating rate. The company's debt now comprises an amended credit facility, a $75 million revolver, $500 million in senior unsecured notes due in 2028, and $250 million due in 2030. Corus also reported a notable increase in free cash flow to $46 million, a 40% increase from the previous year, despite a 10% decrease in consolidated revenue to $270 million. The company is managing a decrease in TV advertising revenue and subscriber revenue, with TV segment profit margins dropping to 9% from 21% the previous year. On the operational front, Corus's Global News saw a 12% increase in total minutes viewed, with both linear and digital platforms experiencing growth, while the specialty portfolio experienced challenges due to an oversupply of digital video inventory. The company anticipates a mid-teens percentage decline in TV advertising revenue for Q3 2025 but remains focused on cost reduction initiatives and leveraging the Buy Canadian movement to bolster advertising revenues.Corus Entertainment Financial Statement Overview
Summary
Corus Entertainment faces significant financial challenges. The income statement shows declining revenues and persistent losses. The balance sheet is concerning with high leverage and negative equity, while cash flow statements indicate potential liquidity issues despite positive operating cash flow.Income Statement
The income statement shows declining revenue with a significant decrease over the TTM period. Gross profit margin is shrinking, and net income has been negative for several periods, indicating ongoing profitability issues. EBIT and EBITDA margins have been volatile, with recent figures showing negative EBITDA, a concerning sign for operational efficiency.45
Neutral
Balance Sheet
The balance sheet reveals high leverage with a negative stockholders' equity, indicating financial instability. The debt-to-equity ratio is not meaningful due to negative equity, and the company's equity ratio is also negative, reflecting a precarious financial position with liabilities exceeding assets.30
Negative
Cash Flow
Cash flow statements show positive operating cash flow, but free cash flow has been declining. The operating cash flow to net income ratio is strong due to negative net income, but this is offset by negative trends in free cash flow growth, suggesting potential liquidity issues.55
Neutral
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.20B | 1.27B | 1.51B | 1.60B | 1.54B | 1.51B | Gross Profit |
| 645.24M | 740.50M | 839.33M | 971.36M | 1.00B | 965.86M | EBIT |
| 96.72M | 172.35M | 186.18M | 289.19M | 375.50M | 351.12M | EBITDA |
| -311.97M | -236.59M | 401.30M | 655.86M | 1.03B | 230.23M | Net Income Common Stockholders |
| -839.54M | -772.64M | -428.72M | -232.24M | 172.55M | -607.71M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 91.69M | 82.42M | 56.16M | 54.91M | 43.69M | 45.90M | Total Assets |
| 1.77B | 1.49B | 2.75B | 3.50B | 3.86B | 3.97B | Total Debt |
| 1.05B | 1.17B | 1.22B | 1.40B | 1.49B | 1.66B | Net Debt |
| 954.70M | 1.09B | 1.16B | 1.34B | 1.45B | 1.61B | Total Liabilities |
| 2.16B | 1.83B | 2.29B | 2.60B | 2.64B | 2.92B | Stockholders Equity |
| -426.93M | -465.40M | 317.75M | 752.04M | 1.07B | 899.82M |
| Cash Flow | Free Cash Flow | ||||
| 83.31M | 111.53M | 106.03M | 194.62M | 244.65M | 293.95M | Operating Cash Flow |
| 99.03M | 130.66M | 122.67M | 216.84M | 274.49M | 313.27M | Investing Cash Flow |
| -18.28M | -29.55M | 125.27M | 25.17M | -29.53M | -19.00M | Financing Cash Flow |
| -56.47M | -73.64M | -246.69M | -230.78M | -247.18M | -330.94M |
Corus Entertainment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Performance Comparison
CJREF
Corus Entertainment
0.07
-0.19
-73.08%
TSE:FP
FP Newspapers
0.62
0.02
3.33%
TSE:PNC.A
Postmedia Ntwrk C J
1.38
<0.01
0.73%
TSE:SAT
Asian Television Network International
0.10
>-0.01
-9.09%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.