Radio Jamaica Limited (RJR) saw a 53 per cent decline in net profit for the Group following costs rise and income declined.

RJR’s reported $29.5 million in net profit for the three months to June 30, 2010, compared to $62.78 million in comparative period last year.

Revenues during the review period, comprising the sale of airtime, programme material and the rental of studios and equipment, fell from year-earlier levels.

The three per cent decline resulted from the general economic downturn which resulted in a decrease in the advertising and sponsorships of new products compared to the similar period of 2009 which were not forthcoming in the 2010 quarter.

According to the report to shareholders that accompanied the media house’s financial statements, a further shortfall in revenue resulted from the out of cycle IAAF international athletics events which did not take place during the 2010 quarter.

Other operating income, which includes interest income, foreign exchange gains, the sale of fixed assets, and gains on the revaluation of investment securities also declined 11 per cent in the 2010 quarter from just over $10 million to $8.9 million.

The decline in income was adversely affected by a general increase in expenses.

Selling expenses, administrative expenses and other operating expenses all increased quarter on quarter to reduce operating profit by 51 per cent or $55.8 million.

In the report to shareholders, directors noted that selling expenses grew on the cost of the 60th anniversary celebrations and after increased commission payments following improved revenue collections. Administrative expenses which increased 18 per cent for the quarter to $104 million, did so as a result of salary and other staff related cost increases, higher insurance premiums and costs associated with the development of the Group’s website.

Other increases in operating costs resulted from the Tivoli incursion, a one off event which took place in May, 2010. According to Spaulding there were “significant additional security costs contracted this year as a result of threats against the company, communicated by the security forces and which were associated with the operations in Tivoli specifically and the state of emergency generally”. Costs also increased on the higher charge for fuel, motor vehicle repairs and the rental of a stand-by generator needed to supplement for a burnt out unit.

RJR’s radio division actually saw revenues grow by 2.4 per cent over year-earlier levels, but operating profit from the segment fell from $39 million in the June quarter of 2009 to $15.8 million.

The media group’s audio visual (AV) segment saw a 5.9 per cent reduction in revenues during the review quarter when compared to the corresponding period in 2009, while operating profit dropped from $69.5 million to $36.8 million.

The RJR Group, which comprises Radio Jamaica, Television Jamaica, Reggae Entertainment Television (RETV) and Media Plus Limited a wholly owned subsidiary incorporated in St Lucia, saw an improvement in cash from operations quarter on quarter.