SCMP Group posts HK$57.8m earnings on better ad revenues

PUBLISHED : Friday, 27 August, 2010, 12:00am
UPDATED : Friday, 27 August, 2010, 12:00am

Improved advertising revenues and cost savings helped SCMP Group report a HK$57.8 million interim profit, continuing the business' return to health after it suffered its second-worst loss in a decade a year ago.

The publishing company reported first-half revenue of HK$411.7 million, up 22 per cent on the previous year. It attributed the good performance to an increased number of initial public offerings (IPOs) on the Hong Kong stock exchange, which generated higher sales for its newspaper division.

It also reported a positive outlook for the rest of the year.

'Although the advertising market has not yet fully returned to pre-2009 levels, we are seeing solid, improving trends in display, recruitment and magazine sectors,' the management said in a statement accompanying the results.

During the six months to June, revenues in the newspaper division, which publishes the South China Morning Post, rose 29 per cent to HK$339.8 million.

There were 39 IPOs in Hong Kong during the period, and the Post attracted advertisements from 37 of the companies involved.

In the corresponding period last year, only 14 companies listed in Hong Kong, and the newspaper's revenues from IPO-related activities fell 73 per cent.

The publisher also slashed operating costs in its newspaper business. Staff moved to new offices in Causeway Bay and Tai Po, in the New Territories, after the lease of the group's headquarters at Somerset House in Quarry Bay expired. The relocations saved SCMP Group HK$11.4 million in rent in the six months to June, a 54 per cent reduction.

The group's average cost of newsprint in the first half of this year also fell dramatically, to US$521 per tonne, compared with US$823 in the same period last year.

An interim dividend of 2 HK cents per share was declared.

The company posted a HK$10.5 million loss in the first half of last year, but it swung back into the black for the year to last December, when it made a HK$138.2 million net profit.

The circulation of the South China Morning Post edged up 1 per cent to 101,800 readers. The Sunday Morning Post recorded a 2 per cent circulation gain, to 77,400.

SCMP Group's shares closed down 2.94 per cent at HK$1.32.

Return to health

Adverts from IPOs on the stock exchange helped the group

The publishing company reported first-half revenue of HK$411.7 million, an increase on the previous year of: 22%