SCMP reports lower net profit on higher costs
The SCMP Group, which publishes the South China Morning Post, reported a decrease of 26 per cent to HK$184 million in net profit for the first half year and said it remained "cautious about the economic climate".
Excluding gains on investment properties, the core operation's net profit fell 35 per cent to HK$61.9 million from a year earlier, the company said yesterday.
The decline in net profit was due to higher staff and production costs. Staff costs went up 14 per cent, or HK$22.8 million, year on year. The number of employees grew 3 per cent to 863 by the end of June from the end of last year. Production costs rose 25 per cent, or HK$14.9 million, from a year ago, to HK$73.8 million.
"Most noticeable for our business has been the reduction in the number of businesses preparing for IPOs in the first half of the year, and the slowing down of the recruitment market," SCMP Group chairman David Pang said. "We foresee this trend continuing through the next quarter as the euro-zone crisis continues unabated.
"However, we remain poised for modest recovery, provided the European and China economies are over the worst before the year-end."
The group said groundwork had been laid for a number of new projects that would support its performance in the current half. From Monday, the Post narrowed the width of its broadsheet, which will reduce paper and ink consumption by up to 10 per cent.
The group will also launch its new SCMP.com portal late this month in an effort to gain more readers globally and improve the reader experience significantly.
Revenue during the period was HK$458.1 million, up 3 per cent, driven by higher advertising sales at the magazine publishing business, while revenue from newspaper publishing was stable.
Unaudited circulation figures in the first half were 108,881 and 89,212 for the South China Morning Post and Sunday Morning Post, up 7 per cent and 10 per cent respectively. But the latest figures include 11,000 online subscribers that are not permitted to be included in circulation in the first half of last year.