POST POSTS 22 MILLION LOSS IN Q1
The Post Publishing Public Company Limited has posted a 22 million baht loss for the first three months of 2009, according to information released to the Stock Exchange of Thailand yesterday evening. The same period last year saw a 6.1 million baht loss.
The statement reads: "The global economic crisis and local political uncertainties have led to a substantial decline in advertising spending, and thus a sharp drop of our revenue, while high costs of newsprint still carried over from last year. Sales and service income dropped from 373.8 to 345.2 million baht. Costs of sales and services increased from 255.0 to 275.2 million baht. Gross profit therefore weakened substantially from 119.0 to 70.0 million baht."
"Although we managed to reduce selling and administrative expenses including management's remuneration from 128.0 million baht to 95.6 million baht, it was not enough to compensate for the very weak gross profit."
So costs are up and income is down. The same is true in many Thai companies right now, but not many could afford to be losing what amounts to 250,000 baht per day (in the case of Post Publishing) or 600,000 baht per day (in the case of Nation Multimedia Group).
5 comments:
Spreading out my wet Bangkok Post the other morning, it struck me that it is a fairly slim newspaper.
True, it is broken up into sections but the main section is sometimes (often?) just 4 sheets.
Audited circulation data usually includes average number of pages.
Would you happen to know if this has reduced over the years?
On a related note, when the Post increased the cover price, they offered 2 or 3 year subscriptions at the old rate. I believe accounting rules would not allow them to book all the income in that year, as it would relate to costs to be incurred later. It does beg the question what happens if the going gets really rough.
I believe the pagination aspects of the audit statement has only been recently introduced.
For the last audit statement (second half of 2008) the average was 55 pages per edition with an average of 8 pages (or 15% advertising). Those 55 pages will include things like Guru and that twice-monthly glossy magazine.
On the face of it 55 pages does seem a lot but it does add up when you take into account everything that goes into The Bangkok Post each week.
For The Bangkok Post:
From Audit statement for Jan-June 08
Average Pagination: 55
Average Advertising: 6
Advertising Content: 11.2 %
From Audit Statement for July- Dec 08
Average Pagination: 55
Average Advertising: 8
Advertising Content: 15%
Therefore the percentage of advertising was increasing between the first and second half of 2008.
Auditing circulation doesn't get involved with finances as such, although the actual cost paid for one subscription does need to be stated in the statement. There's a massive rulebook about what can and cannot be included, and what needs to be deducted (such as the cost of any premium of gift).
In terms of accounting I think the whole revenue for a three-year subscription (to use one examples) will be included at the time it was received. I don't think it will be broken down into revenue over the length of the subscription.
Is it the norm to exclude classifieds in counting pagination and advertising?
Today's issue is much thicker than some of the mid-week issues so perhaps it is not representative, but the numbers are;
Main: 14pg 29%
Business: 10pg 21%
Outlook: 8pg 17%
Classifieds: 16pg 33%
Total: 48pg 100%
33% does not take into account any ads appearing in the other sections; there are quite a few obviously.
Re: accounting of subs I found this in the Post financial statement online;
Newspaper subscription income
Newspaper subscription income is recognised on the time-proportion basis over the subscription period.
David, that's really interesting info, thanks.
I've just checked the ABC (Audit Bureau of Circulation) rulebook for International Publications and there are two things to note.
Firstly, the inclusion of these details are entirely optional. Secondly, "The average advertising content is calculated as the average number of advertising pages per issue (display advertising only) across all issues included in the circulation claim for the reporting period. Advertising sold at classified rates, and supplements and sections with independent rate cards should be excluded."
You learn something new every day !
As for the subscriptions income, I can't see any guidelines from ABC on how it should be accounted in the audit statement. I will keep checking.
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