TORONTO -- The company that owns the Toronto Star newspaper will continue to funnel millions of dollars into its tablet app despite failing to muster the audience it hoped for since its launch more than a year ago.
"We remain committed to the initiative," Torstar Corp.'s acting president and publisher David Holland told a conference call with analysts after the company released its third-quarter earnings results Wednesday.
The audience for its Star Touch app is growing modestly, he said, but offered no update on the numbers released last quarter when it said between 55,000 and 60,000 readers access it weekly.
He added that the current audience levels aren't going to yield the revenue they had projected.
Still, the company has invested millions of dollars in the initiative, including $10.1 million in the first nine months of this year.
It plans to spend $1.5 million more on Star Touch in the fourth quarter -- down from $9.6 million in the fourth quarter of 2015 -- and between $2 million and $4 million for all of 2017.
The Toronto Star, one of the most widely circulated papers in Canada, is preparing for its print circulation to drop further and the tablet app will be an important alternative for people to continue to access the paper's news, Holland said.
"This gives our readers a place to go," he said. "So laying that foundation now makes a lot of sense to us."
Holland's comments came the day Torstar reported its first quarterly profit since the quarter ending Dec. 31, 2014.
Torstar reported a $1.4-million profit attributable to shareholders for the third quarter, helped by cost reductions and $53.6 million from the sale of its Vaughan printing plant.
But it said its Metroland and Star groups continue to face a challenging market for print advertising in the early stages of the fourth quarter.
The profit amounted to two cents per share compared with a loss attributable to shareholders of $164.3 million or $2.05 per share a year ago.
Torstar's total operating revenue for the three months ended Sept. 30 was $162.1 million, down from $185.4 million a year earlier.
After adjustments, Torstar had a loss of eight cents per share in this year's third quarter and 13 cents per share in last year's third quarter.
Over the first nine months of 2016, Torstar cut 570 positions -- including at the printing plant -- and expects $34.0 million of annualized savings by the end of 2017 including $9.9 million in the fourth quarter of this year.
Holland said the company feels it's made some progress this quarter as it transitions to a more digitally-oriented earnings base.
Torstar publishes several newspapers, including the Toronto Star, through its Star Media Group and Metroland Media Group. It also operates dozens of digital businesses, including a 56 per cent interest in VerticalScope.
Torstar holds an investment in The Canadian Press as part of a joint agreement with a subsidiary of the Globe and Mail and the parent company of Montreal's La Presse.