FOR the company that was once the leader in the print media industry, the past few years have not exactly been smooth sailing. Saddled with massive debts, dwindling circulation figures and an increasingly smaller share of the advertising expenditure market, it seemed as though the light at the end of the tunnel was getting increasingly dimmer rather than brighter for The New Straits Times Press (M) Bhd.
But all that has changed, according to Malaysian Resources Corp Bhd executive director Shahril Ridza Ridzuan.
“We've done, what we feel is a good job enhancing shareholder value. It also helps a lot that we've managed to reduce the company's debt issue,” he says.
Going forward, Shahril reckons it is the Malay newspapers that will offer the best opportunity for growth. “Malay newspapers come from a very low advertising base as advertisers are still more focussed on the English and Chinese newspapers. This offers tremendous advertisement expenditure growth potential for the Malay newspapers,” he claims.
So far, big improvements, in terms of quality of writing and layout, have been made to most of the newspapers under the group's portfolio.
According to Shahril, the integration of Business Times and New Straits Times went down well with the market. “Circulation has been boosted from 125,000 copies daily before the changes to 155,000 - 160,000 copies now, peaking even to 180,000 copies on good days.
“Now that NST has recovered from its lows and the advertisers are coming back, our target now is to push it to the next level of 180,000 copies circulated daily,” he says.
But it is the group's Malay newspapers that are presenting a more encouraging picture. Berita Harian is still the most widely read Malay newspaper in the country and yet steps have been taken to revamp it again. “We expect this will reinforce its position as the leading Malay newspaper,” Shahril says.
According to Shahril however, Harian Metro, is by far, the group's real success story in recent years. Its circulation numbers, now that it is at roughly 150,000 copies daily, are matching those of NST's.
“Harian Metro's circulation has, in fact, doubled every two years. This is fantastic, really, because it comes on the back of a 20 sen cover price increase to RM1,” Shahril enthuses. The Malay tabloid also just recently increased its ad rate by 20 per cent.
What product is left to be re-looked at now is Malay Mail. Shahril says the issue here is developing a niche market for ourselves. At present, the group is in the midst of conducting market research for Malay Mail.
Financially, the group reported an operating loss in 2001 but made an operational profit in 2002 mainly because of lower interest costs. “I think this year will be very positive for NSTP. We'll probably see it returning to the black and we'll try to achieve further improvements to our operations as well,” he says.
For the financial year ended Aug 31, 2002, NSTP reported a net profit of RM343.25 million, compared with a net loss of RM141.85 million a year ago. The improvement was attributed to an exceptional gain of RM386.72 million following the disposal of Commerce Asset-Holding Bhd shares in April last year.
Stripping off the exceptional item, the group would have reported a narrower pre-tax loss of RM49.3 million in financial year 2002, compared with RM136.5 million in financial year 2001.
In terms of gearing, the group's debts have also reduced significantly from RM1.5 billion initially to RM500 million currently. “We'd like to see this go down even further. Our target is to see it reach around RM200 million to RM300 million,” Shahril reveals.
“We also have a few asset divestments we are looking for NSTP, which will involve its non-core businesses like healthcare management services subsidiary Prosakti Sdn Bhd,” he says. The group had mentioned in the past that it would consider selling its insurance arm AMI Insurans Bhd and newsprint manufacturing concern Malaysian Newsprint Industries Sdn Bhd, for a reasonable price.
“Ultimately, we would like to see NSTP focused purely on the print business and TV3 on the broadcasting business,” Shahril adds.
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