Printing giant TC Transcontinental has posted a first-quarter loss, mainly due to a tax re-assessment, which hit the company for $58 million. The company has also increased the dividends on participating shares by seven percent, now standing at $0.58 per share annually.
The company faced a decline in revenue of four percent in the first quarter compared to a year ago. Transcontinental attributed the decline to the sale of its black and white book printing business to Quad Graphics, which closed on March 1.
"The acquisition of the Canadian assets of Quad/Graphics is an important milestone in our development," said François Olivier, President and Chief Executive Officer of TC Transcontinental. "It strengthens our print business going forward given the industry dynamics and it allows us to extend our integrated marketing activation offering to many new customers. In fact, our transformation continues to ramp up with the growth of our digital and interactive revenues again this quarter."
The company says the asset swap with Quad/Graphics is expected to bring in $230 million in revenues over the 12 to 24 months. The company also decreased its capital expenditures from $21 million to $8 million year over year, but capital expenditures are expected to be $75 million in 2012.
The tax re-assessment covers 2006 to 2010 and relates to the deductions Transcontinental made on investment in capital assets. The company says it intends to contest the re-assessments.