Bermuda Press (Holdings) Ltd. (BPH) yesterday reported a profit of $63,000 for the year through September 2009 — a 96 percent fall from the prior year's earnings of $1.78 million.

The owner of The Royal Gazette and a portfolio of other local businesses and real estate, saw its net earnings collapse through a $1.69 million loss in printing segment operations and a $1.2 million operating loss in the publishing and retail division.

Operating income of $3.14 million in the rental and other segment allowed the company to scrape a profit of five cents per share, compared to $1.29 per share in 2008.

Although BPH managed to trim its expenses by nearly $2 million compared to 2008, that was not enough to offset a $3.4 million fall in revenue.

Since the end of the fiscal year, the company has closed down weekly newspaper the Mid-Ocean News and has promoted Jonathan Howes to the new position of chief executive officer.

In its annual report, BPH added that it had also agreed to buy a "significant minority holding" in online community marketplace provider E-Moo Ltd. and E-Moo (Bermuda) Ltd. BPH explained: "The relative newness of the Internet and the sense of community that E-Moo has developed have given it an edge over traditional classified advertising. E-Moo expects to expand its franchise overseas and your company will thus be in the vanguard of change in this regard."

BPH stated that the company had faced a "perfect storm" of adversity in 2009, amid dismal economic conditions.

The company made reference to the impact of Government stopping its subscriptions and advertising with the Island's only daily newspaper, which has a circulation of more than 14,000.

Premier Ewart Brown announced the move in March 2008, arguing that electronic media advertising was a better use of public funds. No methodology has been given as to how the Cabinet came to the decision.

Last year was the first full year of the move's impact.

In a report to shareholders, BPH president Christopher Whittle and vice-president Michael King wrote: "To an extent, recent events have been a 'perfect storm' of adversity for your company: A government that some feel is trying to hobble the freedom of the press by economic means; a financial downturn, the likes of which few alive have experienced, the effects of which are not yet over; and, in the longer term, technology-driven changes in the way information is produced and delivered, and in the way goods are bought and sold must change the way your company does its business."

BPH said the closure of the Mid-Ocean News, to cut operating expenses, had been carried out with great reluctance and had caused job losses among Bermudian staff.

"No reduction in the depth of press coverage is good for a democracy and it was dispiriting to hear a degree of triumphalism expressed in certain quarters of Government," BPH stated. "The present Government's antipathy towards the independent media cannot possibly be to the benefit of the citizens of Bermuda."

The company said it had enhanced the Gazette's website over the past two years with "breaking news" and video content and that its importance as a point of contact with the public would grow.

BPH also owns the Bermuda Press, the Stationery Store, Office Solutions and Pronto Print, plus a real estate portfolio that includes the Crown House office building on Par-la-Ville Road.

BPH said its commercial printing operation, The Bermuda Press, had been impacted by factors including overseas outsourcing, use of electronic media and cost cutting by businesses.

During the year, BPH added two directors to its board, Stephen Davidson, a director of QuoVadis Holdings Ltd., and Aideen Ratteray Pryse, a founding member of the Bermuda International Film Festival.