Yellow Pages Group, owner of Canada’s Auto Trader and Home Trader, recently announced its effort to raise $165 million ($151.5 US) cash by issuing new shares on the Toronto Stock Exchange. Its August 6 Q209 earnings report may suggest why – though for a directory and classified publisher, the news wasn’t all that bad.

Q209 Yellow Pages Group revenues increased by 4.3 percent, consolidated net earnings for the quarter dropped from $135.7 million ($141 US) for Q208 to $116.8 million ($107.2 US), and cash flow actually increased from $181.8 million ($166.9 US) to $185.5 million ($170.3 US).

The current economic downturn is having its greatest impact on Trader, which experienced its most difficult quarter to date. Trader second quarter revenues were $66.5 million ($61 US) – a year-over-year decline of nearly 27 percent.  The decline narrows to 22.4 percent when taking into account the sale of U.S. operations and other restructuring initiatives completed in the 2008 fourth quarter. Directories and Vertical Media, a division suffering mightily for just about every directory company, fared surprising well, with 23 percent quarterly revenue growth to $75.2 million ($69 US), 36 percent of which came from online rather than print.

The offering of Medium Term Notes Series 9 and Series 8, in addition to paying down debt, might well be about creating new products, such as the Yellow Pages ecoGuide launched this past quarter.

 ”While we continue to manage our business with prudence, we are pushing ahead our efforts in market coverage and in the introduction of new products,” said Marc P. Tellier, President and CEO of Yellow Pages Group, in the announcement.  “For YPG’s management team, these steps are critical to building a strong business and ensuring our long-term success despite the ongoing pressures we are experiencing in the marketplace.”

Developed in collaboration with environmental and municipal organizations, the ecoGuide is located in the front of all new Yellow Pages(TM) directories and includes local environmental services, a household items disposal guide, a list of environmental certifications as well as actions to help Canadians reduce their ecological footprint.

“As we expand our multimedia offers, we expect online advertising to represent a growing share of our media mix with advertisers both in Directories and in Vertical Media,” the quarterly report stated.  “We expect annualized online revenues for Directories and Vertical Media combined to grow by approximately 20 percent in 2010.”

Yellow Pages Group owns and manages YellowPages.ca, Canada411.ca, the CanadaPlus.ca network of directories, YourCommunity.com in the United States, and independent directories in several Mid-Atlantic and Southeast U.S. markets.