(Bloomberg) -- The costs of printing newspapers in the UK soared this year amid paper shortages and spikes in energy prices, prompting the owner of the Mirror and Express tabloids to trim page counts.
The price of paper in Europe has more than doubled since a year ago, with the cost of newsprint reaching an “all-time high,” Reach Plc said Tuesday while releasing its first-half results. Adjusted operating profit declined 32% from the same period last year, and shares subsequently plunged as much as 29%.
UK electricity prices are biting on industrial companies across the board. Costs have risen by 200% since the start of the year, while wood supply has tightened with export cuts from Russia and Ukraine because of the war. The company reduced some of its pagination by 6% this year.
In a phone interview, Chief Executive Officer Jim Mullen acknowledged it's a “challenging market environment” but said the group will continue to print its newspapers and that the long-term decline in print circulation will help reduce these bills over time, alongside hedging energy prices.
“It doesn't put any risk to the future of print,” he said. “We are committed to print.”
The group is on the lookout for acquisitions, “primarily digital,” and cash from the traditional newspaper business helps Reach invest in its digital arm, Mullen said.
Read More: The Energy Crisis Is About to Hit the Paper News Is Printed On
Reach's results come after a torrid pandemic in which newspapers saw commuter circulations and advertising hammered as people stayed at home and businesses pulled back their spending on marketing. London's Time Out magazine and the Independent have pulled out of print in recent years to save costs.
British printers like Palm Paper Ltd., a subsidiary of Germany's Papierfabrik Palm GmbH, warned in October of soaring paper costs in the wake of the energy crisis.
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