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Profitable Papua New Guinea subsidiary cushions fall

SUVA, Fiji (Fijilive, Nov.5 ,2 009) - A strong performance by its Papua New Guinea subsidiary cushioned a 75 percent plunge in 2008/2009 profits for the Fiji Television Group led by losses in Fiji Television Ltd and Compac.

From FJ$2.735 million [US$1.4 million] the previous year, the group’s after tax profit plummeted to FJ$668,128 [US$351,094] in a year described by chairman Isoa Kaloumaira as "one of the most challenging".

"Continuing negative economic growth, the global financial crisis, devaluation of the Fiji dollar and imposition of media censorship in April were unchartered territory sorely testing the mantle of stewardship," said Kaloumaira.

A depressed operating environment continued to negatively impact advertising revenue and retard growth in subscriber numbers. The group’s total revenue of FJ$26.61 million was 1.36 percent lower than last year’s.

A net profit after tax of FJFJ$2,832,224 by Media Niugini offset the losses in Fiji enabling the group to achieve the overall net profit position, said Kaloumaira.

Fiji Television Ltd’s FJ$1.362 million after tax loss was mainly due to the increased cost of programming and satellite delivery and a FJ$1.1m provisioning.

Advertising sales revenue decreased by 15 percent.

Fiji TV chief executive officer Tarun Patel attributed the drop to clients reducing their advertising spending.

"The global economic crisis has had a huge adverse impact with our advertising clients. We also saw clients opting for cheaper advertising marketing mediums with our competitors in the print and broadcast industry," Patel said.

Subsidiary company Compac’s performance was the worst in a number of years, said Kaloumaira.

Compac’s total revenue was down by 27 percent to FJ$1,067,191 resulting in a loss of FJ$565,125.

"The continuing downturn in the building industry exacerbated the losses from the company’s industry related business unit. Its transmitter sites revenue remained steady but this was insufficient to cover the mounting losses from the building industry related business unit. From the group’s perspective, a review of the company’s strategic fit into group’s overall business thrust is necessary and is to be undertaken," Kaloumaira said.

By comparison, PNG subsidiary Media Niugini Ltd performed according to expectations, with revenue growing seven percent.

"Media Niugini’s performance reflected the continuing growth in Papua New Guinea’s economy despite the recessionary impact of the global financial crisis. MNL contributed 34 percent towards the group’s total revenue."

Group directors recommend a final dividend of five cents to bring the total for the year to 14 cents.

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