Investment gains boost SPH earnings by 14% - Jan 09, 2007 (BT)

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The Straits Times / The Business Times News On SPH

Investment gains boost SPH earnings by 14%

By Wong Wei Kong
Jan 09, 2007
The Business Times

(SINGAPORE) Singapore Press Holdings (SPH) yesterday reported a 14.1 per cent rise in first-quarter net earnings, boosted by stronger investment income and a positive operating environment.

Net profit for the three months ended Nov 30, 2006, was $112.3 million, up from $98.4 million a year earlier. Profit before investment income improved 4.2 per cent to $107.3 million, from $103 million previously. Earnings per share rose to 7 cents from 6 cents.

The media and property group said operating revenue grew 4.2 per cent to $272 million. Revenue from core newspaper and magazine operations rose 2.6 per cent to $241.5 million, while that from property improved 7 per cent to $25.6 million.

Group investment income was 52.4 per cent better at $29.7 million, up from $19.5 million previously, as a result of a capital reduction exercise by an investee company and higher profits from the sale of internally-managed investments. Lower contributions from externally-managed investments were partly offset by foreign exchange gains from forward contracts.

Among SPH's newspapers, Malay language daily Berita Harian saw the biggest year-on-year circulation gain of 10.1 per cent, followed by The Business Times with 4.1 per cent and The Sunday Times with 3 per cent. The circulation of SPH's flagship paper, The Straits Times, dipped a slight 0.6 per cent

SPH said total operating expenses increased 3.9 per cent to $166.8 million. Materials, consumables and broadcasting costs rose 5 per cent, as newsprint costs rose due to higher consumption and production costs went up because of higher circulation sales by magazine operations.

Staff costs were up 2.7 per cent due to an increase in headcount and annual salary increments. Total headcount at end-November 2006 was 3,562, compared with 3,471 a year earlier, due to the launch of new editorial products and ventures into outdoor advertising and other media businesses.

Depreciation charges rose 10.2 per cent as a result of the replacement of existing assets and the commissioning of new editorial and other systems.

SPH said recurring earnings for the current financial year are expected to be satisfactory.

'The positive business climate is expected to continue providing support to the group's print advertisement revenue,' said CEO Alan Chan. 'Circulation sales are expected to remain at sustainable levels while Paragon looks set to continue to generate healthy rental yields on the back of generally bullish sentiment in the property market. The development of the exclusive freehold condominium along Thomson Road is under way and scheduled to be launched in the first half of 2007.'

SPH shares dipped 6 cents to $4.50 yesterday.