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SCMP Reporter

The economic slowdown and a sharp increase in paper prices have dragged newspaper publisher Sing Tao Holdings into the red, according to company executives.

The publisher, which owns the Sing Tao Daily  and the Hong Kong iMail, lost HK$62.29 million in the year to March 31.

In the previous year, the company made a profit of HK$2.84 million.

Sing Tao's turnover rose by less than 1 per cent to HK$1.27 billion.

On an operating level, Sing Tao lost HK$23.54 million in the year, compared with a HK$22.26 million profit previously.

Chairman Charles Ho Tsu-kwok blamed a sharp rise in paper prices and the economic slowdown for the losses.

The company said paper prices, the key cost factor in its operations, surged more than 30 per cent during the year.

Meanwhile, the economic slowdown resulted in a 2 per cent drop in advertising revenue, executive director Wong Wai-ming said.

Mr Wong said Sing Tao's operations would hopefully remain stable this year.

Sing Tao is in close negotiations with certain media companies which are likely to reach agreement within a couple months, Mr Ho said.

The acquisition plans, if successful, would help Sing Tao return to profit this year.

The Sing Tao losses also helped widen losses of its parent, China Global Technology Group, an investment firm controlled by Mr Ho.

China Global Technology posted a net loss of HK$94.3 million, due mainly to a provision for investment losses.

In the previous year, the company lost HK$92.3 million.

Of the latest loss, 13.6 per cent, or HK$12.8 million, was contributed from its 74.5 per cent-controlled Sing Tao.

China Global Technology acquired its controlling stake in Sing Tao from Lazard Asia Fund in January.

Another HK$81.5 million in losses came from provisions made on a number of investments by the company's former shareholders, Mr Ho said.

'The investments that I made after I bought this company are not losing money.

'We do not need to make any provision for those,' he said.

Global China Technology was formerly consumer electrical products trader Perfect Treasure Holdings.

Turnover fell 18.6 per cent to HK$485.7 million, of which 58 per cent came from Sing Tao's two months of operations.



Paper prices put Sing Tao in red