SPH Q2 profit surges 27.7% to $108m - Apr 13, 2007 (BT)

BackApr 13, 2007

The Straits Times / The Business Times News On SPH

SPH Q2 profit surges 27.7% to $108m

Results boosted by 61.7% rise in investment income to $31.6m.

By Wong Wei Kong
Apr 13, 2007
The Business Times

SINGAPORE Press Holdings yesterday reported a 27.7 per cent jump in second-quarter net profit, thanks mainly to investment income.

The media group said net profit for its Q2 ended Feb 28 this year rose to $108 million from $84.6 million a year earlier, as investment income increased 61.7 per cent to $31.6 million. Investment income was boosted by the sale of internally managed assets and higher gains from externally managed investments.

Mr Chan: Expects print ad revenue to be sustained by positive sentiments

Earnings per share rose to seven cents from five cents.

Stripping out investment income, profit edged up one per cent to $83.9 million.

Operating revenue grew 4.5 per cent to $250.6 million. Revenue from core newspaper and magazine operations rose 4 per cent to $218.1 million, driven mainly by 4.6 per cent growth in print advertisement revenue to $161.6 million and 2.1 per cent growth in circulation revenue to $51.2 million. The property segment posted a 9 per cent increase in revenue to $27.3 million.

Total operating expenses at $169.7 million were up $11.1 million or 7 per cent due to higher staff costs. Staff costs rose $7.3 million or 11.1 per cent because of annual salary increments, increases in staff variable bonuses and a bigger headcount.

'The increase in staff costs was in line with the group's ongoing efforts to ensure that staff salaries remain competitive as well as to incentivise and motivate staff to excel in their performance,' SPH said.

SPH's had 3,628 staff at end-February, up from 3,472 a year earlier. The increase in headcount related to new subsidiaries and new print and online initiatives.

Materials, consumables and broadcasting costs, depreciation and other operating expenses were higher in Q2 by $1.2 million (2.9 per cent), $0.7 million (5.8 per cent) and $1.9 million (5.3 per cent) respectively, in line with increased business activities.

For the half-year ended Feb 28, 2007, net profit, including investment income, rose 20.4 per cent from a year ago to $220.3 million. Excluding investment income, profit was up 2.8 per cent to $191.3 million.

SPH has declared an interim dividend of seven cents a share, which will be paid on May 15. The dividend is on a tax-exempt, one-tier basis.

Commenting on the outlook for the rest of the financial year, chief executive Alan Chan said recurring earnings are expected to be satisfactory.

'Positive business and consumer sentiments are expected to continue providing good support to sustaining the group's print advertisement revenue,' he said. 'With ongoing efforts to boost readership of the group's publications, circulation sales are expected to remain at sustainable levels.'

Mr Chan said Paragon, SPH's flagship commercial property in the heart of Orchard Road, is expected to ride on strong sentiment in the property market and continue to generate healthy rental yields.

Profits from Sky@eleven, a freehold condominium development sold recently by the group, will be recognised using percentage-of-completion method over the life of the project and disclosed accordingly, SPH said.