Earnings per share declined to 6.7cents from 11.4cents for the same period the year prior. Dividend payable per share will be 2.0cents.
The increase in revenue was mainly driven by higher advertising sales from its magazine publishing business and higher rental income from its investment properties, while revenue from its newspaper publishing business for the six months ended 30 June 2013 was down 1% from the previous year, at $365.5million. The economic slowdown saw revenue from Advertising and Marketing Services declining 1% to $221.8million, with a shortfall in advertising sales mitigated by special executions, events and new products. Online display advertising revenue for newspaper division increased 19%.
The results include fair value gains in investment properties of $59.6million compared with $122.1million in 2012. Carving out these gains, net profit fell by 18%, largely due to higher staffing costs. Staff costs rose 26% or $48.4million due to significant investments in additional business interests, including development and deployment of smartphone and tablet services and the July 2012 acquisition of the Elle magazine publishing business in Hong Kong. Costs were also impacted by salary increases, the provision of a bonus and a change in the accounting treatment of the pension fund valuation.
The cover price for the South China Morning Post was increased by $1 to $9 in January, with minimal impact to its circulation. Overall circulation inclusive of digital subscription remains healthy.
The Magazines division generated $124.7million in revenue and the net profit attributable to shareholders was $24.3million, both significantly higher than last year. The growth in revenue and profit was mainly due to the inclusion of Elle’s results. Other women’s titles remain strong. Harper’s Bazaar, in particular, reported a 9% growth in revenue and 8% growth in EBITDA.
Group net cash outflow from investing activities for the period was $38.6million. Capital expenditure for the period amounted to $27.7million, including payments made for the purchase of new printing presses. The Group also made a deposit of $10million for the acquisition of the Hong Kong businesses of AsiaCity Ltd, publisher of HK Magazine, which was completed after the end of the reporting period.
CEO Robin Hu remarked: “Despite weak momentum in the economy and slowdowns in the advertising sector, our businesses remain stable and healthy. We are focused on growing organically as well as diversifying our revenue sources, strengthening our product portfolio and brands and investing in future growth. We’ve added new revenue-generating printing presses, developed a suite of new, brand enhancing print and digital products and a portfolio of events to enhance our reach and revenue. Positive momentum within the company itself is strong and we are well poised to continue upon our growth trajectory.”
About SCMP Group Ltd and South China Morning Post
SCMP Group Limited (SEHK: 583) is a leading newspaper and magazine publisher in Asia. Its flagship publication, South China Morning Post, is Hong Kong’s internationally recognised English language newspaper and has the city’s most affluent and influential readership.
First published in 1903, the newspaper has developed an enviable reputation for authoritative, influential and independent reporting on Hong Kong, China and the rest of Asia. Available in print, iPad™ and online through scmp.com and e-reader editions, South China Morning Post reaches a global audience with daily breaking news, analysis and opinion, multimedia articles and interactive forums. The South China Morning Post received 64 awards in 2012 for excellence in editorial, marketing and technical capability. Other titles in the Group include the Sunday Morning Post, the Chinese editions of Cosmopolitan, Harper’s Bazaar, ELLE and CosmoGirl!, HK Magazine, The List, Where Hong Kong, and Where Chinese玩儿.