04/11/2013 08:24 EDT | Updated 06/11/2013 05:12 EDT

Astral Media has profitable Q2, expects its pay TV services to grow

MONTREAL - Astral Media Inc. expects to increase its pay TV subscribers and expand platforms for its online and mobile streaming service as it awaits approval on whether it can be acquired by BCE Inc. (TSX:BCE)

Chief executive Ian Greenberg said Thursday that Astral's pay TV services will benefit from strong programming and uptake from its mobile app for content from The Movie Network.

"I think we'll see a substantial increase in subscribers over the next six months as compared to a substantial loss in the previous year's second half," Greenberg told financial analysts.

Astral (TSX:ACM.A) said it recorded its 66th consecutive quarter of profit after announcing it had $41.2 million in net earnings in its second quarter, up eight per cent from $38.2 million in the year earlier period.

The Montreal specialty TV, radio and outdoor advertising company wants regulatory approval from the Canadian Radio-television and Telecommunications Commission to be purchased by BCE (TSX:BCE).

Greenberg said it's too early to give subscribers numbers for the app, but noted it's popular.

"The app pickup on Apple has been absolutely outstanding and beyond our wildest expectations," he said.

"So we are expecting excellent results because of TMB and HBO Go and I think that will be reflected in substantial growth in the second half of this fiscal year."

The service is currently available to Bell TV, Cogeco and Rogers Cable subscribers. Astral expects to add other TV providers in the future.

Astral will make TMN Go available on other platforms, and over the next several months, it will launch the service on the Android and XB platforms as well as Samsung smart TVs and Blu-ray players, Greenberg said.

Greenberg also said despite a challenging economic environment, Astral has achieved strong financial results.

"This performance was achieved in a market environment that remains challenging and allowed us to record a 66th consecutive quarter of profitable growth."

Until the CRTC issues a decision on the $3.38-billion friendly takeover bid by Bell, Astral remains committed to financial discipline, Greenberg said.

Astral's second-quarter profit amounted to 73 cents per share of diluted earnings, up from 69 cents a year earlier.

Revenue also increased slightly, rising to $237.1 million from $233.5 million while cash flow from operations rose nine per cent to $54.7 million.

The quarter included $4 million of costs attributed to the friendly deal between BCE's Bell and Astral.

The two companies submitted a revised deal during the quarter that included plans to sell some assets under an agreement with the Competition Bureau.

The CRTC rejected the original deal, citing the high level of market penetration the two companies would have in some TV markets.

Shares in Astral were down three cents to $48.85 in mid-afternoon trading Thursday on the Toronto Stock Exchange.