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SPH net profit climbs 18% to $506.2m - Oct 13, 2007 (BT)

BackOct 13, 2007

The Straits Times / The Business Times News On SPH

SPH net profit climbs 18% to $506.2m

Profits boosted by rise in contributions from property, advertising.

By Uma Shankari
Oct 13, 2007
The Business Times

MEDIA group Singapore Press Holdings said yesterday that its net profit for the year ended Aug 31, 2007, rose 18.1 per cent to $506.2 million - from $428.5 million a year ago - as contributions from property and advertising increased.

Last year's profit had included an exceptional gain of $66.8 million, mainly from writing back impairment losses.

This year, operating profit rose 20.2 per cent to $434.2 million, which included maiden profit recognition of $47.8 million from the sale of units at Sky@eleven condominium.

Operating revenue increased 13.6 per cent to $1.16 billion, from $1.02 billion a year earlier.

Turnover from the company's property unit showed the greatest year-on-year rise - climbing 80.2 per cent to $177.8 million from $98.7 million a year ago. The 273-unit Sky@eleven, which was sold out after its launch earlier this year, contributed some $71.3 million to revenue while Paragon's rental income grew $7.8 million.

Revenue from the newspaper and magazine division rose 5.8 per cent to $959.4 million, from $907 million a year ago.

Group investment income also rose 79 per cent to $146.2 million due to a net profit from sale of investments and profits from capital reduction exercises by StarHub and MobileOne (M1). SPH owns stakes in both telcos.

For the year ahead, SPH chief executive Alan Chan said the outlook for the company's print advertisement revenue is positive given the healthy economic environment. The property segment will also be boosted by profits recognised for Sky@eleven, he said.

'The group remains committed to sustaining the core newspaper business' margin and will continue to invest in new media platforms as part of its growth strategy,' he said. 'Barring unforeseen circumstances, the directors expect the recurring earnings for the current financial year to be satisfactory.'

To date, SPH has invested about $50 million in its various new media platforms. SPH chairman Tony Tan said the company could invest another $50 million in such new media platforms over the next few years.

SPH proposed a final dividend of 19 cents a share for the 2007 financial year, comprising a normal dividend of nine cents per share and a special dividend of 10 cents per share. Together with an interim dividend of seven cents a share paid out during the year, total dividend for the year will be 26 cents.

SPH's shares fell two cents - or 0.4 per cent - to end at $4.48 yesterday. The stock has gained 4.7 per cent since the start of the year, compared with a 29.2 per cent gain in the benchmark Straits Times Index.

When asked if SPH was concerned that its share price was lagging the market, Dr Tan said: 'I am confident that over time, this (the moves taken to improve the company's performance) will be recognised by the stock market and that the share price will perform accordingly.'