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SPH's 18% rise in annual profits to $506m surpasses forecasts - Oct 13, 2007 (ST)

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The Straits Times / The Business Times News On SPH

SPH's 18% rise in annual profits to $506m surpasses forecasts

Figure lifted by gain from sold-out condo project and surge in investment income.

By Chua Hian Hou
Oct 13, 2007
The Straits Times

MULTIMEDIA group Singapore Press Holdings (SPH) has blown away market expectations with an 18.1 per cent rise in net profits to $506.2 million for its full year ended Aug 31.

A 10-analyst poll by Bloomberg had put SPH's earnings at $465.2 million, while a 12-analyst poll by Reuters Estimates put the group's gains at $462 million.

Its profits were boosted by a 'maiden profit' of $47.8 million from the sale of its sold-out Sky@eleven condominium and a 79 per cent surge in investment income to $146.2 million.

Revenue was $1.16 billion, up 13.6 per cent from $1.02 billion the year before.

Earnings per share was 32 cents, up from 27 cents the year before, while net asset value as at Aug 31 was $1.36 per share, up from $1.28 as at Aug 31 last year.

SPH will pay a final dividend of 19 cents per share for a total dividend payout of 26 cents this year, up from 24 cents the year before.

It had, said SPH chairman Tony Tan at the results announcement yesterday, been a 'good year' for SPH's 'core, adjacent and new media' businesses.

The company, which publishes 14 newspapers and more than 90 magazines, had enjoyed strong print advertisement revenues of $725.1 million, up 7.2 per cent from the year before.

It had also successfully maintained overall circulation and readership numbers, something media companies have been struggling with globally.

Meanwhile, its online and new media projects such as Stomp, omy and ST701 have all been growing. For instance, ST701, launched just last year as a jobs site, was recently expanded to include cars, property and retail products.

While its online properties would not show 'significant profit' for years yet, Dr Tan emphasised that these portals were a necessary long-term investment for the company.

Online advertising, he said, has been growing in regions such as Europe and the United States.

And while this expected growth in online advertising has not happened yet in Singapore, SPH's investments would ensure that it was ready to ride this wave when it did come.

SPH had invested $50 million in its online projects to date, and is expected to double its investments in online media over the next few years, said Dr Tan.

The company had also successfully contained its expenses.

Wage costs, for instance, had risen by just 12.5 per cent or $33.6 million, despite having 150 additional employees as well as paying out bigger bonuses and annual increments compared to the year before.

Newsprint, the media industry's perennial bugbear, had also seen a rise of just 0.6 per cent.

SPH chief executive officer Alan Chan was upbeat about the company's future.

'Outlook for the group's print advertisement revenue is positive, given the generally healthy economic environment,' he said.

Barring unforeseen circumstances, he said, 'the directors expect the recurring earnings for the current financial year to be satisfactory'.

SPH shares closed two cents down at $4.48. The results were announced after the market closed.

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chuahh@sph.com.sg