Bermuda Press Holdings Ltd.'s half-yearly profits fell by a third as the withdrawal of Government advertising from The Royal Gazette and the slowdown of the local economy impacted the company.

In the six months up to March 31, 2009, Bermuda Press (BPH), parent company of the Gazette and the Mid-Ocean News, made net income of $773,926, compared to $1.17 million in the same period the previous year.

Revenue fell to $16.6 million from $17.86 million, a fall that was partly offset by a reduction in expenditure.

In a letter to shareholders, dated yesterday, BPH said: "The first six months of fiscal 2009 have been influenced by the global economic slowdown that is affecting most businesses in Bermuda and by the continued withdrawal of advertising from The Royal Gazette by the Government.

"The Royal Gazette continues to fight for open government and the public's right to know, despite the punitive actions taken by Government in the past year."

Premier Ewart Brown announced in March last year that Government was cutting its subscriptions and advertising with the Island's only daily newspaper, which has a circulation of more than 14,000.

The Premier argued that advertising through electronic media was a better use of public funds. No methodology has been given as to how the Cabinet came to the decision.

A poll of the Bermuda public found that 86 percent of the Island's adult population read The Royal Gazette at some point during each week.

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 a strategic review of the company and its subsidiaries, carried out with IBM, was completed early in the second quarter and is being considered by the board.

"The business models of newspaper and print businesses worldwide are under pressure to modernise and the board feels that responding based on an appropriate long-term plan is critical to the future success of your company," the letter states.

This year BPH said it was focusing on the "need to modernise traditional business models and structures".

During May, the Mid-Ocean News underwent a redesign from a broadsheet to a tabloid format — a move that had been well received in the community by both readers and advertisers, BPH said.

Dividends to shareholders are currently being paid out at 19 cents per share — a yield of more than six percent to yesterday's share price. The payout will be maintained "as long as satisfactory levels of profitability can be achieved," BPH said.