The Bermuda Press (Holdings) Ltd. yesterday reported profits at the printing and newspaper company fell more than 16 percent to $1,027,800 in 1995.

Operating profits for the year ending September 30 dropped 21 percent to $970,202 but was offset by a $57,598 gain on the sale of an investment.

In 1994, the company, whose main operating subsidiaries are The Royal Gazette Ltd. and The Bermuda Press Ltd., earned $1,228,855.

President Mr. Roger Davidson reported to shareholders: "Given Bermuda's soft economy, your company's results this year are satisfactory.'' But he complained about the "huge increases in the international cost of newsprint'' for the publishing of The Royal Gazette and sister newspaper, The Mid Ocean News .

He said: "This has been a major problem for newspapers in all countries. It has caused staff cuts in some newspapers, forced a few to close, resulted in smaller page dimensions and has led one newspaper to impose a newsprint surcharge on customers similar to the local electricity fuel surcharge.

"The situation is very difficult for everyone in our industry. As of November, there is no stabilisation of newsprint prices in sight. Our costs in Bermuda are always higher than on the continent because of shipping and import duties.'' Just this month the company increased the prices of its newspapers to 65 cents.

Mr. Davidson also highlighted rising costs and other forces, like heavier competition, affecting the company's commercial printing company, Bermuda Press Ltd.

He said: "Very stiff competition and some long term contract pricing has meant that we have had to absorb most increased costs without any increase in selling price. The cost for paper has risen by 40 percent.'' He pointed to a changing printing business environment where the new competition faced by the company included their own customers.

"Overseas suitcase salesmen are more and more visible,'' he said. But even with a recognition of the need for more innovation, and the company's opening of a new quick printing service, Print Express, the company president remained concerned about the issue of customs duties.

He said: "The duty advantage that overseas printers and publishers continue to enjoy is unfair and ensures an uneven playing field. This must change if there is any hope of growth in Bermuda's printing industry.'' The annual report for the 1994/95 year shows total revenues rose from more than $17.8 million to more than $18.5 million, while expenses kept pace, growing from more than $16.6 million to nearly $17.6 million.

The company's loan position was reduced during the year from $435,478 to $163,541, and, $100,000 was added to reserves for self-insured risks. A substantial investment in equipment was made during the year, costing $1,221,006.

The company declared, and paid, $696,118 in cash dividends, compared to $594,600 declared and $551,093 paid last year. At 48 cents a share in paid dividends (38 cents last year), the company moved closer, for the third consecutive year, to the 56 cents a share paid out in 1991. Shareholders' equity per share rose from $11.11 to $11.34.

Newspaper publishing continued to earn more than 61 percent of revenues, nearly $11.4 million of the more than $18.5 million in revenues. Printing contributed more than $4.2 million.