Gleaner weathers difficult quarter, declares dividend

After what has been described as a softening in the market for the third quarter, The Gleaner Company Limited returned an after-tax profit of J$176 million for the nine months to September and has declared a dividend of 3.5 cents per share.

The dividend, to be paid on December 2 and applicable to shareholders on record as at November 25, will bring to 28.5 cents a share the total payment to stockholders so far this financial year.

With growth in the Jamaican economy remaining uncertain, media companies like The Gleaner, with their heavy reliance on advertisers, have been forced to innovate, manage their costs tightly and optimise all available income streams.

For the nine months to September, The Gleaner - the publisher of this newspaper - reported revenue of J$2.42 billion, an increase of one per cent compared to the corresponding period in 2010. Its gross profit of J$1.26 billion was down by J$27 million compared to 2010, given increases in its cost of sales.

The company was able to contain its operating expenses to a marginal 1.6 per cent rise, at J$1.17 billion, compared to J$1.15 billion in the January to September 2010 period.

After the addition of net finance income, which included J$134 million of interest income on its pension receivable, The Gleaner Company posted profit before taxation charge of J$234 million versus J$651 million for the same period in 2010.

Last year's comparative account included a one-time accrual of J$495.5 million in income arising from an estimate of the company's share of surplus from its discontinued defined-benefit pension fund. The fund was discontinued on July 15, 2010 in favour of a more widely utilised defined contribution pension fund.

After taxation of J$59 million, the profit attributable to shareholders was J$176 million and resulting earnings per stock unit of 14.5 cents.

"Our experience in the market this last quarter is that there has been a slowing down compared to the first half of the year. We have had some significant developments regarding the country's governance which will naturally serve as a distraction for commerce," said Managing Director Christopher Barnes, commenting on the results.

"While the impending election will cause some indecision the market, commercial activity in the final quarter, which includes the holiday season, is expected to pick up. We are confident that with our credible, market-leading coverage of current events, our recent innovations like our new and very popular Blackberry App, and our ongoing multimedia thrust, we are positioned advantageously to capitalise on any market opportunities presented," Barnes said.