Canwest reports first half 42 percent profit increase - six month results indicate another record breaking year in 1997 (Part 2 of 3).

WINNIPEG, Manitoba--(BUSINESS WIRE)--April 18, 1997--CanWest Global Communications Corp. (TSE:CGS.S., CGS.A., NYSE:CWG) CanWest entered into an agreement to acquire Westpac Banking Corporation's interest in TV3, effective April 1, 1997. Because payment of the purchase price due September 1, 1997 has been established at a fixed amount and has been secured by a letter of credit, generally accepted accounting rules in Canada require consolidation of TV3 results from the date of the agreement, notwithstanding that the transaction was completed on April 1, 1997. Consolidation of the TV3 results has provided the opportunity for the Company to correct an historical two-month lag in the recording of the results of TV3. Historically, CanWest had recorded its share of TV3 results based upon TV3's reporting of its quarterly results. Accordingly, the first quarter and six month results include the Company's share of TV3's results for an additional two months in fiscal 1997.

During the first quarter of fiscal 1997, CanWest financed the acquisition by an unrelated Australian company, of approximately 17 percent of the issued and outstanding shares of Network TEN (representing an approximate 8.5 percent economic interest in TEN). This transaction effectively increased CanWest's economic interest in Network TEN to approximately 66 percent. Further expansion, during the second quarter, of our financing activities in Australia, increased the Company's interest in Network TEN to approximately 76 percent.

SIX MONTHS ENDED FEBRUARY 28, 1997

Combined revenue for the six months ended February 28, 1997 was $407,282,000 compared to $318,047,000 for the six months ended February 29, 1996. This represented a 28.1 percent gain, reflecting strong performances in all sectors of the Company's broadcast operations.

-- In Canada, CanWest Global System's revenue for the first six months of fiscal 1997 rose to $190,404,000, an 11.0 percent increase over the $171,496,000 reported last year. This revenue growth was again attributable to CanWest's strong program schedule throughout the country and the overall upturn in the advertising community.

-- In Australia, Network TEN reported strong gains in revenue for the first six months of fiscal 1997. TEN's contribution to the Company's revenue for the first half of the year was up 38.3 percent to $171,179,000 from $123,798,000 reported during the first half of fiscal 1996. This reflects the increase of CanWest's share in Network TEN's revenue to 76 percent in the second quarter, and also takes into account contributions from the Perth and Adelaide stations which Network TEN acquired in late 1995. The results also include foreign exchange gains as Network TEN results have been converted at an average rate of $1.075, compared to $1.019 last year. On a same station basis, Network TEN airtime revenues before conversion to Canadian dollars were up approximately 8 percent.

-- In New Zealand, TV3's contribution to CanWest's revenue was up 100.8 percent during the six months ended February 28, 1997, rising to $45,699,000 compared to $22,753,000 reported during the same period a year ago. This increase reflects CanWest's increased economic interest in TV3 effective November 1, 1996 as well as inclusion of CanWest's share of TV3 results for an additional two months in fiscal 1997. TV3's revenue for the six months ending February 28 was up 4.6 percent over the same period last year, reflecting continued growth in audience share. TV3's results have been converted at an average rate of $0.9501 compared to $0.8867 last year.

Combined operating profit before amortization and corporate and development costs (broadcast operating profit) for the six months ended February 28, 1997 rose 28.3 percent to $154,523,000 from the $120,402,000 reported in prior year. Broadcast operating profit growth across the Company's three operations reflected the revenue increases noted above, coupled with strict ongoing attention to operating cost control.

-- In Canada, broadcast operating profit totaled $78,105,000 for the first six months of fiscal 1997, a 17.4 percent increase over last year's total of $66,548,000. This increase was directly related to the growth in revenue.

-- In Australia, Network TEN's contribution to CanWest's broadcast operating profit was up 35.2 percent to $59,959,000 for the six months ended February 28, 1997. This compares with $44,348,000 for the same period a year ago. The increase was due primarily to CanWest's increased economic interest in Network Ten and contributions from Perth and Adelaide.

-- In New Zealand, TV3's broadcast operating profit contribution increased by 73.1 percent to $16,459,000 versus $9,506,000 last year. This increase was attributable to CanWest's increased economic stake in the Network.

Combined operating profit before amortization, but after corporate development expenses (EBITDA) rose 28.4 percent to $146,953,000 during the second quarter of fiscal 1997, up from $114,481,000 in fiscal 1996.

Earnings from continuing operations rose 41.8 percent to $80,838,000 in the first half of fiscal 1997 from $56,990,000 during the same period a year ago.

Cash flow from continuing operations rose 35.1 percent to $99,515,000 from $73,686,000 in the first six months. Growth in cash flow reflects the increased profitability of the Company.

Earnings per share were $0.55 for the first half of fiscal 1997 compared to $0.41 per share last year. Cash flow per share was $0.67 in 1997 versus $0.53 per share last year. Per share results are affected by the dilution created by the issuance of 9 million non-voting shares in June 1996.

SECOND QUARTER ENDED FEBRUARY 28, 1997

Combined revenue for the quarter ended February 28, 1997 was up 26.8 percent to $187,467,000 from $147,859,000 reported in the first six months of fiscal 1996. Each of the Company's segments contributed double digit percentage increases.

-- In Canada, CanWest Global System revenue for the second quarter was up 12.3 percent to $89,426,000 from the $79,620,000 reported in the same period last year. This significant growth reflects increased market share in an increasingly buoyant advertising market.

-- In Australia, Network TEN continued its strong showing in what is traditionally the softest period of the year. For the quarter ended February 28, 1997, CanWest's share of Network TEN revenue was $79,387,000, a 41.2 percent increase over the 1996 second quarter total of $56,210,000. This significant increase reflects CanWest's increased economic stake in TEN. In the second quarter, Network TEN's revenue was up approximately 8 percent over the prior year.

-- In New Zealand, TV3 also reported a solid second quarter thanks largely to some strong program ratings during the spring and summer months. For the quarter ended February 28, 1997, TV3 contributed revenue of $18,654,000, up 55.1 percent from the $12,029,000 reported in the second quarter last year. The results for the second quarter of fiscal 1996 reflect CanWest's share of TV3 results for the three month period ended December 31. With the correction of the historical two-month lag in the recording of the results of TV3 in the first quarter, the results for the second quarter of 1997 reflect TV3 revenues for the months of December, January and February, which traditionally are the weakest months of TV3's year. Compared to last year, TV3 revenues in this period held firm in a very competitive marketplace.

Combined broadcast operating profit before amortization and corporate and development costs (broadcast operating profit) for the quarter ended February 28, 1997, rose 24.1 percent to $62,249,000 from the $50,149,000 reported last year. Broadcast operating profit growth across each of the Company's three operations reflected strong revenue increases described above, as well as increased economic interests from Network TEN.

-- In Canada, broadcast operating profit totaled $34,644,000 for the second quarter, an 25.8 percent increase over last year's total of $27,543,000. This increase was directly related to strong revenue growth throughout the CanWest Global System.

-- In Australia, CanWest's share of Network TEN's broadcast operating profit rose to $22,755,000 for the six months of fiscal 1997, an increase of 38.3 percent over the 1996 total of $16,452,000. This increase can be attributed in large part to CanWest's increased economic stake in Network Ten.

-- In New Zealand, TV3's contribution to broadcast operating profit was $4,850,000 compared to $6,154,000 reported last year. This decrease reflects the seasonality of the three month period ended February 28, 1997 compared to the three month period ended December 31, 1996 which was particularly strong. On a same period basis, TV3's broadcast operating profit in 1997 was comparable with the prior year.

Combined operating profit before amortization, but after corporate and development expenses (EBITDA), rose to $57,157,000 during the second quarter of fiscal 1997 from the $49,247,000 reported in fiscal 1996. Corporate and development expenses in 1997 include costs related to the Company's unsuccessful applications for licences in Alberta and Victoria, British Columbia.

Earnings from continuing operations rose 6.2 percent to $27,398,000 in the second quarter from $25,799,000 in 1996.

Cash flow from continuing operations climbed 12.7 percent to $38,606,000 from $34,241,000 last year. Growth in cash flow reflects the increased profitability of the Company in fiscal 1997.

Earnings per share in the second quarter were $0.19 in each of 1996 and 1997. Cash flow per share totaled $0.26 in 1997 compared to $0.25 per share last year. Per share results are affected by the dilution created by the issuance of 9 million non-voting shares in June 1996.

RESULTS DETERMINED IN ACCORDANCE WITH U.S. GAAP 

Net earnings determined in accordance with U.S. GAAP were $27,398,000 for the three months ended February 28, 1997, compared to $24,490,000 in the second quarter of fiscal 1996. Primary and fully diluted earnings per share from continuing operations were $0.18 in the second quarter compared to $0.18 in 1996.

Net earnings determined in accordance with U.S. GAAP were $74,781,000 for the six months ended February 28, 1997, compared to $56,734,000 in the first half of fiscal 1996. Primary and fully diluted earnings per share from continuing operations were $0.50 in the first six months compared to $0.41 in 1996.

CONTACT: CanWest Global Communications Corp.

John E. Maguire, 204/956-2025

204/947-9841 (FAX)