RADIO Jamaica Limited (RJR) posted a 35 per cent decline in net profit for its third quarter ended December 31, 2010, but said the performance was better than expected.

RJR’s after tax profits for the third quarter were $67.7 million, compared to $103.6 million in the three months to December 31, 2009, while revenues were down 4.4 per cent to $536.6 million.

In its statement to shareholders accompanying the financial statements, the group’s executives said that “better than expected performance was largely due to the team maximising positives from the latest media surveys, including a focus group survey conducted in the second half of 2010”.

But the review period saw a reduction in new product launches and the downturn in advertising within a difficult economic environment.

Several other issues were said to have impacted the communications group’s profitability, including the May/June state of emergency, increased costs associated with it; standby security provision; alternate power provisions for transmission sites due two weather systems; higher fuel costs associated with these activities and website maintenance and development costs.

The gross profit margin of 70 per cent in the quarter reflects a decline of 4.3 per cent compared with prior year’s quarter results, due mainly to revenue reduction; increased salaries-related expenses; website development expenses that should increase shareholder value in the medium term six months to a year.

Selling expenses reflected a $2.8 million or 2.7 per cent reduction over 2009; due to a lower spend on advertising and promotion.

The 9.9 per cent increase in administrative expenses was also due to the salary, professional fees and introduction of websites and Internet activities to allow improved streaming capabilities and real-time access to our news, sports and other features both locally and abroad.

“This area of development is expected to yield improved financial results in the medium term,” said the statement to shareholders.

Operating expenses of $83 million in the third quarter was consistent with the cost incurred in prior years, while finance cost in the third quarter were lower than the corresponding period in 2009 by $2.8 million, or 47.9 per cent due to the repayment of two of the loans that existed in prior years.

Cash and short-term investments increased by $161 million due to improved profitability. Shareholders’ Equity improved by $140.06 million since March 31,2010 to stand at $1.2 billion. In October 2010, consistent with the dividend policy of the company, an improved dividend was paid to shareholders.