SPH net profit rises to $112m; core operations strong - Jan 15, 2008 (ST)
The Straits Times / The Business Times News On SPH
SPH net profit rises to $112m; core operations strongNewspaper and magazine business, property-related income drive growth.
By Chua Hian Hou
Jan 15, 2008
The Straits Times
MEDIA company Singapore Press Holdings (SPH) has kicked off the year with a solid set of first-quarter results.
|BIG CONTRIBUTOR: The sold-out Sky@eleven condominium contributed $16.1 million to SPH's property-related income. Photo/ SPH|
Its profit before investment income - a reflection of its recurring business income - surged 19.8 per cent to $126.5 million for the quarter ended Nov 30 year on year.
That was on the back of a 14.7 per cent rise in revenue to $312.1 million.
A 66.9 per cent fall in investment income to $9.8 million depressed SPH's bottom line - but net profits still rose 1.3 per cent to $111.9 million.
The company said most of its income continued to come from its core newspaper and magazine business, which posted 'strong print advertisement revenue growth' of 10.5 per cent to $202.9 million.
Property-related income from its Paragon shopping mall, located in the prime Orchard Road shopping belt, and its Sky@eleven condominium also saw an impressive 69.9 per cent spike to $43.5 million. The sold-out condominium contributed $16.1 million.
The dip in investment income, the company explained, was 'partly due' to the 'recent volatility in financial markets'.
It also noted that the previous year's investment income was boosted by higher dividend income from MobileOne and profit from a capital reduction by StarHub.
Operating costs rose 11.8 per cent to $188.5 million.
The rise in expenses was due to property development costs for Sky@eleven, which accounted for $4.6 million.
Staff remuneration was also up 14.7 per cent, or $10.1 million, due to a 'higher variable bonus provision in line with continued improved profitability of the newspaper business, increased headcount and annual salary increment'.
The total headcount at SPH, which publishes 14 newspapers and more than 90 magazines, rose to 3,771 as at November, compared to 3,562 a year earlier.
This was 'mainly due to the inclusion of new subsidiaries and staffing for new media businesses', the company said.
Earnings per share was unchanged at seven cents, and net asset value per share was $1.39 as at Nov 30, up from $1.33 as at Aug 31.
Looking ahead, SPH chief executive officer Alan Chan said recurring earnings for the current financial year are expected 'to be satisfactory', barring unforeseen circumstances.
'Advertisement revenue will continue to be driven by the Singapore economy, which is expected to grow at a more moderate pace in 2008,' he said, adding the company will 'focus on sustaining its operating profit margin amid rising business costs'.
Meanwhile, profits from Sky@eleven will also continue to provide 'an added boost to the group's earnings', said Mr Chan.
The company also said Paragon is 'expected to continue to reap healthy rental yields'.
SPH's share price closed flat at $4.60 yesterday, before the results were announced.
AMONG the highlights of SPH's first-quarter report:
- The group's core newspaper and magazine business recorded strong print advertisement revenue growth of 10.5 per cent to $202.9 million.
- Property-related income, from its Paragon shopping mall, located in the prime Orchard Road shopping belt, and its Sky@eleven condominium, grew 69.9 per cent to $43.5 million.
- Net profits rose 1.3 per cent to $111.9 million, despite a 66.9 per cent fall in investment income to $9.8 million and higher operating costs of $188.5 million.
- Staff remuneration was up 14.7 per cent, or $10.1 million, due to a 'higher variable bonus provision in line with continued improved profitability of the newspaper business, increased headcount and annual salary increment'.