THE GLEANER Company Ltd recorded trading profit of $235 million in 2007, a 104 per cent increase from the $115 million recorded the previous year.

However, pre-tax profit for 2007 declined to $193 million, resulting from a reduction in employee benefit asset of $245 million and impairment loss of $201 million at its United Kingdom subsidiary. After-tax profit for the group was $98 million.

In filings with the Jamaica Stock Exchange (JSE) last week, the media group, which reported net profits of $274 million in 2006, showed that its group sales climbed by just over 17 per cent to $4.2 billion in 2007, a jump of nearly $630 million. There was, however, an 18 per cent increase in cost due to increases in the price of raw material, exchange rates and reorganisation and restructuring expenditure. The filings also stated that the situation at GV Media, its United Kingdom subsidiary, had shown improvement during the last quarter of 2007.

Outside of the cost associated with the restructuring of GV Media, the biggest hike in expenses was in the group's cost of sales, which jumped $442 million, or approximately 20 per cent. The group was, however, able to contain the rise of its administrative expenses to $44 million, or six per cent - less than half the rate of inflation.

Not realised profit

In 2007, the company credited only $65 million of profit from the employee benefit asset, a 79 per cent reduction to 2006.

Under International Financial Reporting Standard rules, such accounting profit arising from the company's pension scheme goes straight to the bottom line. The Gleaner's filings with the JSE explained, however, that this was not realised profit as it represents future economic benefits to be derived from the reduction in the company's contribution to the pension scheme.