RJR profit dips despite election advertising

Despite the general election advertising blitz during the Christmas season, the December quarterly profit for media giant RJR Communications Group plunged by 25 per cent to $50 million.

The RJR Group controls nearly half of television and radio viewership, with its December third-quarter revenues just below $500 million.

"This ... result, bolstered by spot advertising from the general elections, was still affected by weaker advertising revenues this financial period compared to the previous year's," according to management notes accompanying the results released last week to the Jamaica Stock Exchange.

Management blamed reduced Christmas advertising spots during its December third quarter which negated election spending gains.

"Revenues for the quarter of $495.8 million included significant spot advertising for the general elections but these were negated by even higher reductions in traditional Christmas advertising; hence revenues were lower than the prior year by $40.7 million or 7.6 per cent," the management said.

The reduced revenues and profit actually hid efficiency gains for the RJR group, which slashed nearly $30 million or 14 per cent from its selling and administrative costs to $178.3 million combined.

Total equity of the RJR Group remains flat at $1.26 billion as at December. However, its long term debts total just $19 million, down from $57.1 million a year prior.

Retailers and other businesspeople postponed hopes of Christmas gains for January due to the general election and soft economy. At least one department store, Ammar's, banked on post-season sales in January to make up for the dampened activity.

steven.jackson@gleanerjm.com