WINNIPEG, MANITOBA -- (Marketwire) -- 03/13/13 -- FP Newspapers Inc. ("FPI") (TSX: FP) announces financial results for the quarter ended December 30, 2012. FPI is the successor to the business of the FP Newspapers Income Fund and owns securities entitling it to 49% of the distributable cash of FP Canadian Newspapers Limited Partnership ("FPLP").
Fourth quarter operating results of FPI
FPI reported net earnings of $2.0 million for the three months ended December 30, 2012, compared to a net loss of $13.1 million for the same period last year. The increase in net earnings is due to a $15.0 million non-cash write-down of the investment in FPLP Class A limited partner units during the fourth quarter of 2011 to reflect a continuation of soft advertising revenues, which started in 2008 and decreasing newspaper industry valuations.
Fourth quarter operating results of FPLP
FPLP's revenue for the three months ended December 31, 2012 was $30.2 million, an increase of $0.2 million or 0.8% from the same three months in the prior year. Advertising revenues for the three months ended December 31, 2012 were $20.6 million, a 0.9% decrease compared to the same period last year. FPLP's largest advertising revenue category, display advertising including colour, was $13.6 million, a decrease of $0.1 million or 0.6% from the same period in the prior year, primarily due to decreased spending in the automotive and travel categories, partly offset by increased spending in telecommunications and government categories. Classified advertising revenues for the fourth quarter decreased by $0.2 million or 8.8% compared to the same period last year, primarily due to a decrease in the employment and obituary categories, partly offset by an increase in the real estate category. Flyer distribution revenues for the fourth quarter were higher by $0.1 million or 3.1% compared to the same period in 2011, primarily due to an increase in flyer volumes and a small increase in the average earned rate.
Circulation revenues for the fourth quarter decreased by $0.1 million or 1.5%, with lower unit sales offsetting increased revenue from higher subscription rates. Commercial printing revenues for the quarter increased by $0.4 million, primarily due to increased printing at our Derksen Printers operation. Digital revenues for the fourth quarter increased by $0.1 million or 14.9% compared to the same period last year, primarily due to the increases in revenues from online advertising and website design services.
Operating expenses for the three months ended December 31, 2012 were $24.0 million, a $0.2 million or 0.9% increase from the same quarter last year. Employee compensation costs for the fourth quarter increased by $0.3 million or 2.5%, primarily due to the wage increases included in the collective agreements and an increase in the expense for the defined benefit pension plan, partially offset by the reduction in the number of employees. Newsprint expense for FPLP's own publications for the quarter decreased by $0.2 million, primarily due to lower volumes mainly from fewer circulation copies. Newsprint expense for commercial printing for the fourth quarter increased by $0.1 million compared to the same period in the prior year, primarily due to increased commercial printing at Derksen Printers. During the fourth quarter a restructuring charge of $0.1 million relating to employee severance costs was incurred.
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