SPH net profit slips 8.5% to $160m but operating numbers improve - Jul 12, 2007 (ST)

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The Straits Times / The Business Times News On SPH

SPH net profit slips 8.5% to $160m but operating numbers improve

Third-quarter profit before one-off items soars an impressive 48% to $186 million.

By Chua Hian Hou
Jul 12, 2007
The Straits Times

SINGAPORE Press Holdings' (SPH's) bottom line dipped by 8.5 per cent to $159.8 million in the third quarter but the headline figures belie a strong quarterly showing.

That is because net profit for the same period last year was inflated by $69.1 million in one-off gains. The underlying performance for the three months ended May 31 was strong.

GOOD SHOWING: SPH's solid growth for the quarter ended May was driven by strong income from print advertising and the property division. --ST FILE PHOTO

Profits before exceptional items for the period ended May 31 were up an impressive 48.3 per cent at $186.1 million.

And operating profit, which reflects day-to-day operations, rose 15.2 per cent to $108.8 million, said SPH.

Total revenue was up 8.4 per cent at $288.1 million.

SPH publishes 14 newspapers and more than 90 magazines, as well as holds significant stakes in TV and radio stations in Singapore.

The solid growth was driven by strong print advertising revenue, which was up 10.4 per cent at $195.6 million, and property revenue, which rose 6.6 per cent, to $26 million.

SPH also received a boost from its group investment income, which shot up a blistering 139.1 per cent to $75.3 million. Most of this was profit from the sale of investments, as well as profit from a capital reduction exercise by telco M1.

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

He said that 'barring unforeseen circumstances, the directors expect the group to perform better than in the last financial year'.

'Print advertising looks promising as the economy is doing well,' he said.

He added that SPH's Paragon, a high-end mixed retail and office complex in Orchard Road, 'is generating healthy rental yields amidst strong sentiments in the property market'.

Mr Chan also said SPH is strengthening 'its presence on various new media platforms and extending its reach beyond the core newspaper business'.

Net profit for the group's first nine months was $380.1 million, up 6.3 per cent over the previous period.

This came despite a 5 per cent rise in operating expenses in the third quarter, primarily due to 12 per cent higher staffing costs.

Total headcount in May this year was 3,684, up from 3,583 a year earlier, due to the acquisition of new subsidiaries and new hires for the company's new media businesses.

Earnings per share for the quarter were 10 cents, up from seven cents previously.

Net asset value per share was $1.29 as at May 31, up a cent from Aug 31 last year.

SPH's share price fell two cents to $4.50 yesterday, prior to the results announcement.