Quebecor Returns To Profit And Growth

Quebecor World has reported that for the fourth quarter of 2004 its operating income increased 89 per cent to $163 million in the fourth quarter, compared to $86 million in the fourth quarter of 2003.

Quebecor World has reported that for the fourth quarter of 2004 its operating income, before allowances, increased 89 per cent to $163 million in the fourth quarter, compared to $86 million in the fourth quarter of 2003.

Operating margin on the same basis increased to 8.6 per cent compared to 5.0 per cent in the previous year.

For the full-year of 2004, revenue increased to a record $6.6 billion compared to $6.4 billion in 2003.

After impairment of assets, restructuring and other charges, Quebecor World reported net income of $144 million.

That compared to a net loss of $31 million for the full-year 2003.

Operating income before impairment of assets, restructuring and other charges increased 53 per cent to $483 million compared to $316 million in 2003 and on the same basis, operating margin was 7.3 per cent compared to 4.9 per cent last year.

Before impairment of assets, restructuring and other charges net income in 2004 was $239 million compared to $40 million last year.

Net income for the fourth quarter was $45 million, compared to a net loss of $54 million for the same period in 2003.

Before allowing for the impairment of assets, restructuring and other charges, the company said that net income in the fourth quarter was $91 million, compared to a loss of $38 million for the same period last year.

Consolidated revenues for the quarter increased nine per cent to $1.9 billion compared to $1.7 billion in the same quarter last year.

Excluding what Quebecor described as the favourable impact of currency translation and an additional week in 2004, revenues increased one per cent compared to the fourth quarter of 2003.

Pierre Karl Peladeau, the president and chief executive officer of Quebecor World commented: "We enjoyed a very strong fourth quarter as witnessed by our increased revenue, operating income and margins.

I am particularly pleased that we have shown organic growth in sales in the quarter.

That is a further confirmation of our ability to attract and retain customers by providing them with the best platform and services in the industry." He continued: "Our fourth quarter and full-year financial results demonstrate that we have made the right choices to improve and grow our business for our shareholders, customers and employees.

As we go forward we will continue to focus on cost containment while investing in new technologies to improve performance and enhance our service offering." In the fourth quarter Quebecor World continued to implement its restructuring to reduce costs and improve productivity.

As a result, the company incurred $53 million for impairment of assets, restructuring and other charges in the quarter.

The cash portion of the charge, $14 million, is principally related to global work-force reductions - in the fourth quarter there were further cuts in workforce through the consolidation and downsizing of several small facilities.

The reductions included 2,518 jobs, 2,228 of which were cut as of December 31 2004.

A further 290 jobs will also be cut during 2005.

However, the restructuring also involved the movement and relocation of selected pieces of equipment and will create 567 new positions spread across several facilities for a net workforce reduction of 1,951 people, said the company.

In 2005, the company said it expects to record $17.8 million in restructuring charges related to the 2004 initiatives.

In North America, income increased to $138 million and the operating margin was 9.5 per cent in the fourth quarter compared to $71 million and 5.2 per cent in the same quarter last year.

Operating margin for the full-year increased to 8.5 per cent compared to 6.0 per cent in 2003.

The increases in operating income and margin were due to higher volumes in several business groups and the positive impact of restructuring and cost containment.

Revenues increased eight per cent to $1.46 billion compared to $1.35 billion in the fourth quarter of 2003.

In 2004 revenue increased one per cent to $5.13 billion compared to $5.06 billion in 2003.

In Europe, revenues increased by 11 per cent in the fourth quarter to $376 million and 13 per cent for the full-year to $1.30 billion.

Volume increases of three per cent in the quarter and four per cent in 2004 helped offset a continuing competitive price environment across the company's European operations it said.

The company's French operations recorded a positive operating margin, albeit lower than the same period last year.

For the full-year of 2004, operating margin in France was negative but improved over 2003.

The company said that the results were achieved despite temporary inefficiencies created by the phase out of a facility in Stockholm (Sweden) and the transfer of equipment to two other facilities.

On the same basis operating income in 2004 doubled to $50 million from $24 million in 2003 and operating margin rose to 3.9 per cent compared to 2.1 per cent last year.

In Latin America revenue and volumes increased in the quarter and for the full-year.

Revenue in the fourth quarter increased 17 per cent to $56 million compared to $48 million in the fourth quarter of 2003.

On a full-year basis revenue increased nine per cent to $192 million compared to $177 million in 2003.

Quebecor's board declared a dividend of $0.14 per share on multiple voting shares and subordinate voting shares.

The board also declared a dividend of CDN$0.3845 per share on series three preferred shares, CDN$0.421875 per share on series four preferred shares and CDN$0.43125 on series five preferred shares.

The dividends are payable on March to shareholders of record at the close of business February 24.

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