Mar 2011 Financial News

OCM writes off goodwill of $244M

Mar 21, 2011

ONE Caribbean Media (OCM), the owner of the Express newspaper and TV-6, wrote off $244 million in the intangible asset of goodwill, mainly associated with its acquisition of The Nation Corporation in Barbados. OCM did not write off The Nation Corporation in Barbados, as reported in the Guardian on Saturday.

OCM chief executive officer, Dawn Thomas, said: “I want to say categorically that OCM did not write off The Nation Corporation. What was written off was goodwill of $244 million, which is an intangible asset, as explained in the chairman’s statement. The Nation Corporation is a profitable group and hence the issue of assets write-off does not arise.”

In Note 7 of its 2009 annual report, OCM identified the goodwill of its cash-generating units as follows: The Nation Corporation (Barbados) – $206.431 million; Caribbean Communications Company (Trinidad) – $37.996 million. This means that the Nation accounted for 84.5 per cent of the goodwill write off. The chairman’s statement accompanying the 2010 results does not identify The Nation Corporation as the main source of the goodwill impairment.

But, in the statement, OCM chairman Sir Fred Gollop, who previously chaired the Nation group, said: “The directors acknowledge that the trends in media technology and the use of Internet-based media are already having an impact on paper-based media applications. It was on this basis that the directors took the conservative approach to write-off this asset.

“It should be noted that this write-off is a one-off, non-cash charge that has no impact on our operations nor on our ability to fund strategic investments and pay dividends.”

OCM declared a profit before tax and goodwill impairment of $92.2 million in 2010, which was nine per cent less than its 2009 results. When taxation and the impairment of goodwill are taken into account, the media house declared an after-tax loss of $178.6 million in 2010.


Source:
Barbados Advocate
Monday March 21, 2011

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=16508