Ashford W. Meikle, Staff Reporter 
A view of the Gleaner building, central Kingston. - Ricardo Makyn/Staff Photographer
In a year dominated by tight cost controls and a major acquisition, the Gleaner Company Limited has recorded an increase net profit for its financial year ending December 31, 2004.
Based on the audited results, released to the stock exchange, net profit after tax amounted to approximately $366 million or about $135 million more than the $231 million earned for the comparative period in 2003.
This was earned on revenues of $2.9 billion.
The spectacular leap in the group's bottomline was principally as a result of employee benefit asset income of approximately $224 million, arising from the actuarial surplus in its superannuation fund and, to a lesser extent, increase in sales.
PENSION SURPLUS
As a result of International Financial Reporting Standards requirement, the surplus of $224 million from the superannuation fund is reflected in the group's profit and loss statement.
This surplus, which was $63 million in 2003, "is not available to the group as it represents future economic benefits to be derived from the reduction in the company's contribution to the pension scheme."
In fact, discounting the artificial contribution of the superannuation surplus to the group's bottomline, net profit amounted to about $217
million from its operations, an increase of almost 15 per
cent compared to the previous year when it posted an
after-tax profit of $189 million before employees benefit asset income.
MIXED PERFORMANCES
The performance of the group's various business segments were mixed.
Its flagship division, media service (comprising Gleaner publications, The Voice publications and Independent Radio), registered a respectable 19 per cent increase in income.
However, the books and stationery segment (which includes the Bookshop and Sangster's Book Stores) posted relatively flat revenues of about $543 million.
The other business segment posted an impressive 68 per cent increase in revenues which jumped from $19 million in 2003 to $32 million in 2004.
COST OF SALES
To the credit of the Gleaner's management, the company managed to contain its cost of sales in a year of high inflation. For example, the 13 per cent rise in cost of sales lagged behind the 15 per cent increase in revenues. As a result, gross profit registered an 18 per cent growth to $1.3 billion.
Total expenses from the group's operations increased by 18 per cent, to almost $1.3 billion, principally as a result of The Voice group acquisition. Still, the group was able to return an operating profit of almost $434 million.
FUTURE PLANS
Based on the future plans including a restructuring of the overseas subsidiaries it is expected that the group's performance will improve in 2005.
The group's profit in 2004 was adversely affected by its overseas companies, including the newly-acquired Voice newspaper, which incurred losses.
