KUCHING: Media Chinese International Ltd (MCIL) expects newsprint price, which is currently at a high level, to gradually come down in the short to medium term.
The will make a positive contribution to the group’s publishing and printing business, which is continuing to face challenges as high inflationary pressure will weigh on consumer and business sentiment, leading to an adverse impact on the markets’ advertisement spend, said MCIL.
The company said rising operating costs will put downward pressure on its publishing and printing segment’s profitability. In financial year ended March 31, 2023, MCIL reported a 8.4 per cent growth in group revenue to US$132.7 million from US$122.4 million in the previous financial year but recorded lower pre-tax profit of US$1.71 million, down from US$2 million.
“The revenue growth was primarily attributed to the resumption of international travel as COVID-19 restrictions were relaxed worldwide and countries gradually opened up their borders, leading to a significant growth in the turnover of the group’s travel segment from last year’s US$1,110,000 to US$10,471,000.
“Meanwhile, the group’s publishing and printing segment’s turnover grew marginally by 0.7% to US$122,184,000 when compared to the US$121,277,000 recorded in last year,” MCIL said in a management discussion and analysis report.
The company said the 14.6 per cent drop in the group’s pretax profit in the latest financial year was due to the increase in provision for long service payment of US$1.16 million for the group’s employees in Hong Kong in accordance with the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Ordinance 2022.
For the current financial year under review, both the ringgit and Canadian dollar weakened against the US dollar, thus resulting in negative currency impacts of about US$5.485 million and US$219,000 on the group’s turnover and pre-tax profit respectively.
Basic loss per share for the year ended March 31, 2023 was 0.01 US cents, reflecting decrease of 150 per cent from last year’s earnings per share of 0.02 US cents.
As at March 31, 2023, the group’s cash and cash equivalents and short-term bank deposits totalled US$93.6 million.
Reviewing the group’s Malaysia publishing and printing operation, MCIL said it posted an 1.1 per cent growth in turnover to US$74.1 million from US$73.2 million in the previous year.
Driven by the revenue growth and savings from cost reduction efforts, the Malaysia operation achieved a 16.6 per cent rise in pre-tax profit to US$6.12 million against last year’s US$5.25 million. MCIL, which is dual listed on Hong Kong Stock Exchange and Bursa Malaysia, is a leading Chinese media group in Malaysia, with a portfolio of four daily newspapers — Sin Chew Daily, China Press, Nanyang Siang Pau and Guang Ming Daily and a suite of magazine titles.
“The group continued to strengthen its leadership position by focusing on meeting its audiences’ changing preferences and providing them with credible and quality information content.
“At the same time, the group continued to improve on its advertising offerings and to leverage on its strength of having a rich portfolio of mainstream publications and digital channels to curate bespoke advertisement solutions for optimum reach. “The Malaysia operation has also developed a one-stop advertising solution for its customers, offering an array of media options, including print, digital, ground events and magazine titles to enhance the effectiveness and efficiency of advertising buys,” it added.
MCIL said the operation’s primary focus during the past year has been to attract new customers, increase brand awareness, support customer engagement initiatives, and foster an affinity for its products and services.
To achieve these goals, it strived to offer specialised products and services that are tailored to the specific needs of each target market sector.
“To drive greater engagement and expand its reach, the Malaysia operation has launched aggressive promotion campaigns and established a digital subscription platform and an industry aggregation platform which allow it to gain a better understanding of its audience’s preference and behaviours.
“As global supply chain and energy costs continued to increase due to geo-political tensions, the operation’s performance was also affected by rising operating costs, in particular costs of newsprint and other production materials.
To counter these negative impacts, the Malaysia operation has continued to improve its product offerings and optimise its operational efficiency.” On its Hong Kong and Taiwan operations, MCIL said despite facing a challenging operating environment, the group’s publishing operations recorded a marginal increase of 0.3 per cent in turnover to US$40.67 million for the year under review from US$40.55 million recorded in last year.
The segment returned to the black with a pre-tax profit of US$275,000 against pre-tax loss of US$528,000 previously.
The improved performance was also contributed by the subsidies the group received under the Hong Kong government’s 2022 Employment Support Scheme. In Hong Kong, MCIL publishes Ming Pao Daily News, and its subsidiary One Media Group provides Chinese language lifestyle publications both in Hong Kong and Taiwan.
In North America, MCIL said the group’s publishing and printing operations in Canada faced challenges of escalating costs and weak consumer sentiment due to the government there imposing a series of interest rate hikes in an attempt to cool down inflation.
The segment’s turnover fell marginally to US$7.44 million in the current financial year from US$7.5 million a year ago.
On the group’s travel and travel related services, MCIL said it has slowly recovered as countries worldwide gradually reopened their borders and eased restrictions for international travel in 2022. MCIL said the group’s digital business continued to expand its digital offerings by growing revenue from existing businesses and introducing new crossplatform products and revenue streams during the year under review.
“The online advertising industry is currently undergoing a significant transformation as marketers and networks are moving away from cookie-based tracking methods. In response to the change, the group has taken steps to develop its data-first strategies which helps the group in mapping its products and services to customers’ preferences and to devise marketing strategies that best suit the customers’ needs.
“In addition, the group’s Malaysia operation has launched an “M-Lab” platform which offers one-stop integrated marketing and analytics solutions for its customers.
This broadens the group’s range of data-led revenues and provides better pricing for advertisers, ultimately driving business growth amid the growing trend of advertisers’ preference for performance-based marketing and the removal of third-party cookies,” it added.
