Free London newspaper edited by George Osborne has not been in the black since 2016

The Evening Standard made a loss of almost £12m last year as the freesheet continues to struggle in a tough advertising market.

The title, which is controlled by Evgeny Lebedev and edited by the former chancellor George Osborne, made a pre-tax loss of £11.5m in the year to the end of September 2018. It takes losses at the Standard, which recently cut jobs as part of a cost-saving merger of print and online operations, to more than £23m in the last two years.

The newspaper, which distributes 860,000 free copies a day around the capital and Greater London region, increased revenues by 2% to £65m “despite the tightening markets for traditional print display and classified advertising”. The revenue rise helped to reduce its operating loss by 5% year on year to £9.5m.

Newspapers are struggling against the drain of readers and advertisers away from traditional print products to digital media, where Google and Facebook attract the lion’s share of ad spend.

The Evening Standard has been driving its digital presence, growing its UK audience by 21% and overseas reader base by 48% in the year to September 2018, which in turn helped digital revenues grow by 29%.

The UK advertising market has become even tougher since the Brexit vote, with advertisers holding back, or cutting, ad budgets amid uncertainty about the nature of Britain’s exit from the European Union. The Evening Standard has not been in the black since 2016 – the year the Brexit vote was held – when it made a £517,000 pre-tax profit.

Last year’s performance dealt another blow to Lebedev’s bank balance as Lebedev Holdings, the company that houses his media assets, including the loss-making London Live TV station, reported a pre-tax loss of £18.5m. In the last two years alone, the company’s total losses amount to more than £36m.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Revenues at London Live, which Lebedev is in talks to sell to a fellow local TV operator, fell by more than a quarter to £3.1m. Earlier this year, London Live cut a quarter of its staff. The company said it had achieved a “modest improvement” in operating losses at the TV station.

In December, Lebedev sold 30% of Lebedev Holdings to a Saudi businessman with ties to the country’s state-owned bank for £25m. In 2017, Lebedev sold a stake in the digital-only Independent to the same Saudi businessman.

Earlier this month, the culture secretary, Jeremy Wright, said he was “minded” to order regulators Ofcom and the Competition and Markets Authority to investigate the deals on public interest grounds over concerns the editorial independence of the titles could be affected.