TOM's profit suffers online

HONG Kong-based media conglomerate TOM Group said yesterday it will focus on building a diversified portfolio of businesses rather than depending too much on the Internet sector.

The company, controlled by Hong Kong billionaire Li Ka-shing, posted a 50-percent decline in first half earnings from a year ago, mainly affected by a slump in profit from its Internet business as mobile regulators and carriers enforced tougher rules on wireless service providers in the second half of last year.

Sales in the first six months totaled HK$1.35 billion (US$173 million), a drop of eight percent from the same period last year. The Internet group, mostly portal TOM Online, experienced a 28-percent drop in sales, with profits falling 73 percent.

"TOM Group's strategy has also been to maintain a diversified and balanced mix of media businesses," Chief Executive Officer Tommei Tong said in a statement.

Tong noted that, despite the impact of online businesses on the group's bottom, its offline media business posted a 13-percent increase in revenue and 37 percent profit growth from last year.

"We are seeing encouraging results from our efforts to improve operating performance across business sectors," she said.

Tong said the company will capture opportunities arising from its joint ventures with eBay Inc and Skype to broaden the revenue streams for the online sector and diversify its scope.

In other measures, the company's publishing division posted a 10-percent growth in profit to HK$72 million, on sales of HK$482 million.

Its outdoor media group registered a 20-percent increase in earnings to HK$14 million. Revenue for the sector was HK$213 million, an increase of 15 percent year on year.