Gleaner Company posts $16m loss in first quarter
First quarter results indicate that The Gleaner Company recorded a net loss of $16 million in the first quarter of 2013. This is a significant reversal of the results of the corresponding period last year, when the company reported a first quarter profit of $25.1 million.
The Gleaner Company's Managing Director, Christopher Barnes, foresees the rest of this year to be difficult. But with greater stability of the Jamaican dollar after Jamaica’s agreement with the International Monetary Fund (IMF), as well as accelerated efforts to contain operational costs and enhance revenues, Barnes expects improved performance in the coming months.
Barnes said while the company's traditional print properties will continue to be the back bone for its revenue, he expects it to be shored-up by The Gleaner's growing digital operations.
"Fiscal uncertainty this year is likely to limit market confidence, resulting in softer than normal advertising and promotional spend. However, The Gleaner Company will leverage its expansive multimedia product base and market leadership position to provide the best solutions to its audience and advertising clients," He said.
"Our (digital) strategy is two-fold," Barnes continued, "One, enhancing our digital offering and output, while rolling out new platforms to keep pace with global trends; and two, increasing awareness of, and educating the market on the value of digital advertising."
Advertising provides the bulk of the income for The Gleaner Company, whose first quarter revenue was flat, at $774.7 million.
The company's cost of sales, though, rose 10 per cent to $414.6 million, while its core administrative expenses were up six-and-a-half per cent to $190.7 million. Most other cost elements either flat-lined or dipped marginally.
Barnes said the exchange rate and other cost effects associated with prior year credits and event timing accounted for a large share of the variances.
At the same time, the company reported "other operating" loss of $4.2 million on the sale of an investment, while its net finance income was down by $2.5 million or nearly 10 per cent.
Even with a $4 million tax credit, The Gleaner couldn't avoid a loss of 1.32 cents a share, compared to 2.07 cents a share earnings for last year's first quarter.
Barnes said the company continues to implement "counter measures" against the "external shocks" on the business.
"We have further restructured our distribution network, implemented product pricing adjustments and added new programmes to the line-up in radio," he said.
These moves, plus a surge of activities from its digital marketing and promotional strategy, should drive online sales - the area in which Barnes has been positioning The Gleaner to exploit in the future.
The digital trends in the United States - where up to half of the market says it consumes its news digitally and a third of newspapers have begun to charge for online content – are signals used in shaping the future model for The Gleaner Company.
He said: "Jamaica ...lags the US in terms of what is happening with digital consumption, given our country's lower Internet penetration.
For this reason print advertising remains most effective in reaching large audiences most efficiently.
This makes The Gleaner Company's print products, with their market leadership positions, the best prospects for advertisers.”
But in anticipating an increasingly digital future, Barnes said The Gleaner is well on the way in preparing itself for what is to come with the introduction of The Gleaner e-paper, The Star e-paper, the iPhone app and the BlackBerry classifieds app.
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