Market changes hit SCMP Group

Hong Kong - The SCMP Group has seen a 29% drop in net profits for the six months to June 2008, with changes to corporate listings rules resulting in a 72% dip in IPO related revenue.

In June last year the rules forcing public companies to advertise their notifications in newspapers was dropped, resulting in a half yearly loss of $90.2 million for the SCMP.

Despite high circulation and ad revenue growth from its tabloid competitor The Standard, paid-circulation of The South China Morning Post and Sunday Post increased just 1%, while revenue from its magazine division grew 5%.

The group posted a steep drop of 13% in publishing revenues, which accounted for 96% of its total revenue.

Among all the publications, Classified Post had a 2% decrease in revenue hit by sluggish recruitment activity and a weakening global economy.

Display advertising revenue from the Post Magazine increased 6%, with Cosmopolitan and Harper's Bazaar remained strong.

Kuok Hui Kwong, executive director of the SCMP Group, said he was cautious about the remaining year ahead.

"Given the uncertain economic outlook, we expect growth in certain advertising segments to slow down," he said.