BEIJING - Publishing companies are facing greater challenges than ever due to increasing distribution costs, according to an industry report released Monday.

The publishing and distribution sector's total profit was 18.51 billion yuan ($2.9 billion) last year, down 2.16 billion yuan year on year, according to an annual press and publishing industry report issued by the General Administration of Press and Publication.

The publishing industry still faces a large "cultural deficit", as copyrights are still imported at double the rate they are exported, although the gap narrowed last year. A total of 7,783 varieties of copyrights were exported in 2011, or 2,092 more than that of 2010, the report said.

However, the report noted that a surplus was realized in copyright trade between the Chinese mainland and Taiwan for the first time in 2011. It said 1,656 categories of mainland copyrights were exported to Taiwan last year, with 1,497 imported from the island.

The report pointed out that the number of audio-visual products and electronic publications dropped last year, although profits increased.

The scale of publishing groups and listed companies has become increasingly large, it said, adding that private enterprises played a bigger role in earnings.