TORONTO – Corus Entertainment Inc. has been dealt a blow by a number of analysis analysts, who’ve both lower their targets for the corporate or stopped masking it altogether.
CIBC Capital Markets stated it’s dropping protection of the tv and radio station proprietor due to the “material uncertainty” surrounding its fairness worth.
It doesn’t anticipate Corus to have the ability to generate sufficient money to cowl its greater than $1 billion in excellent debt, for which materials quantities are due in 2027 and 2028.
“Top-line softness has pressured (free cash flow), and we do not expect Corus will be able to meet its debt covenants or repay its debt without relief/restructuring,” it stated in a analysis be aware.
Meanwhile, Canaccord Genuity stated it has revised downward its monetary estimates for the corporate and lowered its 12-month inventory value goal to 10 cents per share from 25 cents.
On Monday, Corus reported a loss attributable to shareholders of $769.9 million in its newest quarter in contrast with a lack of $495.1 million a 12 months earlier.
It stated it expects to have slashed 25 per cent of its full-time workforce by the top of subsequent month because the starting of its 2023 fiscal 12 months.
The tv and radio broadcaster has attributed an promoting hunch this 12 months partly to lingering results from the 2023 Hollywood strikes that delayed manufacturing of key programming, together with inflationary and aggressive challenges.
Last month, the corporate was dealt a blow with the lack of rights to key manufacturers like HGTV, Food Network, Cooking Channel, Magnolia Network and OWN, as of the top of this 12 months.
That got here as Rogers Communications Inc. signed a multi-year cope with Warner Bros. Discovery for the Canadian rights to these standard life-style and leisure manufacturers beginning Jan. 1.
“Following the announcement of the loss of the Warner Bros. Discovery content and under the new executive leadership, the Corus thesis is now very much about balance sheet management (and possible recapitalization) as well as cost restructuring,” stated Canaccord analyst Aravinda Galappatthige in a be aware.
Co-chief government John Gossling instructed analysts that on high of price cuts associated to jobs and programming which can be being eradicated, Corus can also be pursuing choices for aid on “certain financial covenants or repayment terms” from its lenders.
“In addition to our cost reduction initiatives, we are moving at pace to finalize a revised financial plan as part of this process,” he stated on the corporate’s earnings name.
“Corus’ future state needs to be a more sustainable business that will focus on core activities, unique brand positioning and areas where we can win.”
But on Monday, the National Bank of Canada decreased its inventory value goal for Corus to at least one cent from 25 cents.
“Based on our revised estimates … it’s hard for us to ascribe any remaining value for equity holders,” stated analyst Adam Shine in a be aware.
Shares within the firm have been buying and selling for 12 cents on Tuesday afternoon, down 4 cents or 22.6 per cent from its opening value.
This report by The Canadian Press was first printed July 16, 2024.
Companies on this story: (TSX:CJR.B)
