Bermuda Press Holdings Ltd. — the parent company of The Royal Gazette — yesterday reported a profit of $2.3 million in 2006, down by five percent on the previous year.

Company president and director Roger Davidson attributed the fall in net income to a five percent rise in expenses for the year, which was not matched by a corresponding increase in sales in a competitive market.

Bermuda Press Holdings (BPH) yesterday released its annual report for the financial year ended September 30, 2006, which showed that revenue totalled $34.06 million — up $1.4 million on the previous year.

BPH made an operating profit of $2.53 million. But net income was $2.309 million after a mark-down of $225,000 for the year, related to minority interest due to subsidiary stakeholders.

Net income per share was $1.67, down 11 cents on the previous year, and the company announced a cash dividend per share of 76 cents, up two cents on 2005. Shareholders’ equity rose from $27.07 million in 2005 to $28.33 million.

Publishing and retail revenue totalled $24.13 million, commercial printing revenue $7.34 million and rental revenue $2.03 million.

BPH employs almost 200 full-time and 80 part-time staff and owns Crown House Properties, the Bermuda Press, Office Solutions, Pronto Print, Engravers Ltd., Chameleon Print Express, Bermuda Directories and The Stationery Store, as well as The Royal Gazette.

Newspapers The Royal Gazette and the Mid-Ocean News published about the same number of pages last year as in 2005, Mr. Davidson added.

“The challenge facing newspaper publishers in the 21st century is to expand beyond the printed product to become information providers, regardless of the medium,” Mr. Davidson said.

“The opportunity to provide news in the most suitable format — via the Internet, through online video, podcasts and RSS feeds — offers newspapers the chance to add readership, timeliness and relevance to our community news. For management, the simultaneous challenge is to find a way to make such activities profitable.”

In the report, Mr. Davidson said that the success of the international business sector did not translate into prosperity for every Bermuda household. “While there is, undoubtedly, a ‘ripple effect’ on many in the local economy, a single industry is not a solid base on which to build long-term prosperity,” Mr. Davidson said.

“Hence the need to invigorate tourism, as a means of balancing the economy and extending economic opportunity to a broader section of the community.

“New hotels are the currency of the development of the tourism industry and several major projects have been put forward. The most visible of these are a business hotel adjacent to Par-la-Ville Park in Hamilton and the Southlands development.”

Thorough public discussion was needed before such developments were given the green light, as there was evidence that the public was not fully behind the concept of using Special Development Orders for the convenience of Government and developers, Mr. Davidson added.

Bermuda’s economic fortunes were strongly linked to those of other countries, Mr. Davidson said. “Bermuda has lately been riding the crest of generally favourable economic conditions in its largest trading partners, the US, Canada and the UK,” he said.

“As those economies enjoy the benefits of growth and come to terms with the consequences of distorted housing values, an economic downturn seems increasingly likely.

“Bermuda’s continuing development is reliant on these economies achieving a ‘soft landing’, i.e a managed slowing of economic growth, rather than a more sudden reversal of the patterns of recent years.”