HONG KONG, September 1, 2008 – SCMP Group Limited (SEHK: 583) ("the Group") announced today its interim results for the six months ended June 30, 2008.
- Revenue from continuing operations: HK$544.7 million
- Operating profit from continuing operations: HK$142.9 million
- Profit attributable to shareholders: HK$124.5 million
- Earnings per share: $0.08
- Dividend: $0.06
Turnover from continuing operations was HK$544.7 million, representing a 12% decrease compared with the same period last year. Profit attributable to shareholders dropped 29% to HK$124.5 million, mainly due to a decline in notices advertising following the change in listing rules in June 2007 and the volatile stock market.
Operating costs and expenses before depreciation and amortization dropped 1% to HK$377.5 million, within which production costs decreased by 10%, mainly because of a decline in average newsprint cost from US$635 to US$604 per metric ton and lower consumption. The Board of Directors declared an interim dividend of 6 HK cents per share.
The Group’s publishing revenues dropped 13% and accounted for 96% of total revenue of the Group. EBITDA and operating profit margins declined due to the loss of notices revenue. The audited circulation of South China Morning Post and Sunday Morning Post both increased 1% to 107,080 and 81,827 copies respectively, despite the rise of free newspapers.
Display advertising revenue increased 6%, contributed mainly by rising demand for creative advertising executions, higher advertising volume and yield generated from Post Magazine. The first ever panorama advertisement was published in May 2008 and a record number of wrappers were sold in the first half of 2008.
Recruitment advertising revenue decreased 2% due to slow down of recruitment activity as a result of the worsening global economy. Some cost cautious clients are shifting towards lower cost alternatives, which has benefited Jiu Jik and online recruitment.
Notices revenue dropped 72% or $90.2 million, within which IPO related revenue dropped $42.5 million owing to the volatile stock market. Number of IPOs and revenue per IPO were both lower than last year. Revenue from result and other corporate announcements dropped HK$47.7 million after the implementation of the HKEx rules which abolished the requirement to publish announcements and notifications in newspaper in two different phases last year. The first half results reflected the full impact of the changes in listing rules.
Revenue from Magazine Division grew 5% to HK$67.4 million. Advertising sales from Cosmopolitan and Harper’s Bazaar remained strong, despite the fierce competition on newsstands.
The results of the Group’s other businesses included a HK$5.2 million gain on the disposal of the video and film post-production business and a 46% increase of revenue from music publishing mainly from the sale of one compilation album. Investment properties’ revenue increased 55% from HK$8.9million to HK$13.8 million.
Commenting on the business prospects ahead, Kuok Hui Kwong, Executive Director of the Group said, "We are cautious about the second half of 2008. Given the uncertain economic outlook, we expect growth in certain advertising segments to slow down."
With the change in listing rules on company announcements last year, the Groups expects revenues from corporate notices to be consistent with the first half of this year while revenue from IPO announcements will depend on the market situation.
"We will continue to invest in opportunities which leverage our brand’s value across multiple platforms while keeping a steady focus on our core publishing business," concludes Kuok.
About South China Morning Post
SCMP Group Limited (SEHK: 583) is a leading newspaper and magazine publishers in Asia. Its flagship publication, South China Morning Post, is the leading English language newspaper in Hong Kong and has the city’s most affluent and influential readership. Other publication titles of the Group include the Sunday Morning Post, the Chinese editions of Cosmopolitan, Harper’s Bazaar, CosmoGirl! and Automobile magazines.
This press release can be downloaded from www.scmpgroup.com.