Harlequin sees profits rise as sales drop

<p>Harlequin Mills &amp; Boon has increased profits, despite falling revenues, for the first quarter of 2010. But the publisher joined Simon &amp; Schuster in noting &quot;significant growth in digital revenues in the first quarter driven by the growing popularity of ereaders&quot;. <br /> </p><p>Financial results released by parent company Torstar showed profits increased from C$20.6m (&pound;13.2m) to C$22.7m for the three months to 31st March 2010, compared with the same period last year. Revenues fell from C$124.5m to C$112.8m.</p><p>David Holland, president and chief executive of Torstar, said he was pleased with the results. &quot;EBITDA [earnings before interest, tax, depreciation and amortisation] was up in the quarter with the newspapers and digital division rebounding from the low earnings reported in 2009 and Harlequin continuing to achieve growth,&quot; he said. </p><p>&quot;In the newspapers and digital division the results benefited from a modest increase in revenues but the primary driver of the improved earnings were lower costs. At Harlequin, continued progress on the digital front contributed to the earnings growth achieved in the quarter.&quot;</p><p>Holland added: &quot;Throughout the business we remain focused on free cash flow generation and reduction of net borrowings. In the quarter, net borrowings declined by $23m from $516m to $493m.&quot;</p><p>Although he said the company remained cautious about the impact the economic recovery would have on Torstar&#39;s newspaper division, Holland said he anticipated a &quot;solid&quot; performance from Harlequin, &quot;despite the negative impact the strengthening Canadian dollar will have on operating results.&quot; <br /> </p>