Overall picture
Despite advertising billings across all media registering 6% growth in 2005, newspaper advertising revenues were flat compared to 2004, a situation reflected in the Company's own figures. Nevertheless, as Post Today, the Company's Thai-language economic daily, entered its third year, it showed impressive growth in copy sales while circulation of the Bangkok Post also continued to expand.

Net sales
The Company registered a total 2005 revenue of Baht 1,825 million, slightly below the 2004 revenue by Baht 14 million or 0.8%. Nevertheless, advertising revenues for the Bangkok Post and Post Today showed a small increase over the previous year. Other than the two newspapers, the Company's magazines and commercial printing operations had a slightly negative impact on the revenue. Higher oil prices, increased interest rates and fallout from the tsunami all had the effect of slowing economic growth in general, and newspapers felt the> impact the same as other sectors.

Net earnings
The Company earned a net profit after tax of Baht 123 million in 2005, which was Baht 71 million or 37% less than in 2004. The lower profit in 2005 was mainly due to softer advertising sales and increased printing costs. Although the Company was able to cut its promotion expenses by as much as Baht 25 million, the savings were offset by increased retirement expenses of Baht 20 million of which 24 early retirees were accepted in December 2005.

Operating costs
The cost of goods sold was Baht 1,132 million in 2005, an increase of Baht 82 million or 8% from 2004. The increase was mainly due to increased printing costs, of which Baht 55 million related to newsprint for the two dailies.

Liquidity
In 2004, the Company bought newsprint in excess as a hedge against market price fluctuations and this resulted in high inventory levels at year-end. In 2005, the Company reduced its newsprint inventory by Baht 183 million, and this resulted in lower borrowings than would otherwise have been necessary. During the year, the Company bought a piece of land on Bangna-Trad Road for its new printing and distribution facility. A large portion of the cost of the new printing press has already been paid to suppliers. Overall, despite a sharp increase in capital spending, the Company's net borrowings totalled Baht 215 million at the end of 2005.