Directories publisher Yellow Media posts profit on lower revenues of $237.4M

MONTREAL – Directories publisher Yellow Media had a higher third-quarter net profit but lower revenues of $237.4 million, as it continued to transform itself into an online company.

Yellow Media (TSX:Y) says it had a net profit of $41.8 million compared with a profit of $22 million in the same quarter last year. Earnings per share were $1.51, up from 59 cents in the third quarter of 2012.

The improvement followed lower depreciation and amortization expenses, lower restructuring charges, and lower financial charges. The third quarter of 2012 also recorded a loss on settlement of debt.

Yellow’s overall revenues in the three months ended Sept. 30 were down 11.3 per cent from $267.7 million in the same quarter last year.

The publisher of the online and print Yellow Pages in Canada did see improvement in its digital revenues, though, with a 10.5 per cent increase year-over-year to $102 million.

The Montreal-based company said it had fewer advertisers and larger advertisers spent less as they move to “digital products,” which made up 43 per cent of total revenue in this year’s third quarter.

Yellow said it had 283,000 advertisers as of Sept. 30, compared with 319,000 in the same period in 2012.

Yellow Media says it plans to make a debt payment of $92 million on Dec. 2 and has reduced net debt to about $601 million, compared with $782 million as of Dec. 31, 2012.

“As we further transform the business and grow digital revenues, protecting profitability remains a key priority,” chief financial officer Ginette Maille said in a news release on Tuesday.

Yellow Media has been trying to chart a course in an Internet-based marketplace where search engines have eaten into the need for paper directories, which had been a highly profitable, advertiser-driven business for decades. It has expanded its services from business listings to digital services, including producing videos and building websites for small and medium-sized businesses.

The company has hired a new CEO, a 20-year veteran of digital media businesses, who will take over on Jan. 1.

Julien Billot, 45, has been most recently head of the media group for France’s Solocal Group, formerly PagesJaunes Groupe. Prior to joining Solocal, Billot was CEO of Lagardere Active’s digital and new business group.

Billot succeeds Marc Tellier, who held the post from 2001 until he departed in August.