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Article Excerpt
OPERATOR: (Spoken in French) Good morning, ladies and gentlemen. Welcome to Astral Media's fiscal 2008 fourth quarter financial results conference call. At this time all participants are in a listen-only mode. I would like to remind you that after the presentation the analysts will be invited to ask questions first, followed by members of the media. Instructions will be provided at that time to queue up for questions. I would like to remind everyone that this conference call is being recorded on Wednesday, October 29, 2008, at 2:00 p.m. Eastern time. (OPERATOR INSTRUCTIONS) (Spoken in French)
It is now my pleasure to introduce Andre Bureau, Chairman of the Board of Astral Media.
ANDRE BUREAU, CHAIRMAN, ASTRAL MEDIA INC: Good afternoon, everybody. I am Andre Bureau, Chairman of the Board of Astral Media. I'm joined this afternoon by Ian Greenberg, President and Chief Executive Officer; Robert Fortier, Vice President Finance; Alain Bergeron, Vice President of Brand Management and Corporate Communications; Jacques Parisien, Group President, Astral Media Radio and Astral Media Outdoor; and John Riley, President Astral Television Network. On behalf of all of us here in Toronto I would like to welcome you to this fourth quarter and fiscal 2008 year-end conference call. I would particularly like to say that we're very proud to announce another year of strong financial performance for Astral Media. In fact, a 12th consecutive year of growth. (Spoken in French) During the course of this call, Ian and Robert will give you an overview of the results after which we will proceed to the question-and-answer period. As usual, we'll take questions first from analysts, and then from the media. I will now give a chance to Ian to speak first.
IAN GREENBERG, PRESIDENT, CEO, ASTRAL MEDIA INC: Thank you, Andre, and good afternoon, everyone. Thank you for joining us today. I'm obviously delighted today to be able to report such stellar results for the quarter and the year achieved in an increasingly challenging environment. These year-end results include an extra week of operations which affect only our advertising revenues and accounts for an increase of approximately 7% in advertising revenues for the quarter and less than 2% for the year.
Let me start by saying how pleased I am that we were able to address two areas of concern from the third quarter, mainly the Quebec radio decline in revenue and EBITDA and paid TV subscriber growth. First on radio in Quebec,. In Q3 we had recorded a 7% and 21% decline respectively in revenue and EBITDA. We said we would address the situation and are pleased with the 9% increase in revenue and EBITDA over the fourth quarter last year, which is slightly above the Quebec market. Both Astral and the industry percentages include the extra week. Moreover, our Quebec ratings have continued to improve and we are back in a leadership position in the most commercial attractive demos that Radio Energy and (inaudible) deliver.
Now turning to paid TV. Q4 brought very good news with the return to a growth pattern in paid TV subscribers. We grew by 10,000 subscribers in the fourth quarter compared with the loss of 15,000 in last year's fourth quarter. A net improvement of 25,000 subscribers which gives us momentum to start the new fiscal year. At year end we had over 1.7 million subscribers, a new milestone for Astral Media. In parallel, I must tell that you I'm very enthusiastic about the launch of HBO Canada tomorrow at 6:00 a.m. I've actually started working on this initiative about 18 years ago. HBO, as most of you know is one of the most sought after entertainment brands in the world, and we are very confident that it will play a key role in attracting new TMN subscribers in the future.
Now let's look at some key numbers for the overall year. Consolidated revenues grew by 43% in the fourth quarter and 35% for the year. To reach a record $865 million. Our EBITDA reached $289.6 million, a 40% increase over last year. Net earnings from continuing operations increased by 20% for the quarter and 19% to $150.5 million for the year. Basic earnings per share from continuing operations grew by 11% to $0.72 in the fourth quarter and by 11%, $2.67, for the year. These results exclude the impact of future tax rate changes enacted over the last two fiscal years. I'm especially pleased that all our business units performed well, and once again contributed strong EBITDA and cash flows to the Company.
Looking now at each of continues units, television posted good results for the fourth quarter and the year, thanks to both subscriber and advertising revenue growth. Our net books all of our advertising revenues increased by 10% in the fourth quarter and a strong 12% for the year. This compares favorably against the Canadian specialty television market which grew by 8% and the Quebec French language television market which grew by 4% for the year. Again, these numbers include the extra week of operations for both Astral and the industry. Just after year end we launched TELETOON Retro in French and TELETOON Retro now in both French and English is already Canada's largest digital network offered in six million homes.
Turning to radio, revenues grew to $296.3 million for fiscal 2008 while EBITDA increased to $111.1 million for the year. Including the 10-month contribution of the standard radio assets. Radio's EBITDA margin grew to 37.5% which is among the highest in the industry. In the fourth quarter, the standard radio assets recorded revenues of $57.2 million, slowing slightly in excess of 15% over the same quarter last year against a market increase of 11%. Again, taking into account both for Astral and the industry the extra week. EBITDA for the standard assets amounted to $24.8 million for the quarter. EBITDA margin was very strong in the quarter at 43% and 40% for the 10 months. In the fourth quarter we also announced a rebranding of our mix...
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