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SPH Q1 net down 55% but operating gain up - Jan 13, 2006 (BT)

BackJan 13, 2006

The Straits Times / The Business Times News On SPH

SPH Q1 net down 55% but operating gain up

Previous Q1 boosted by income from sale of StarHub stake.

By Wong Wei Kong
Jan 13, 2006
The Business Times

SINGAPORE Press Holdings' first-quarter earnings fell 55 per cent in the absence of exceptional gains recorded in the previous corresponding quarter, but operating performance of the media group received a boost from positive business and consumer sentiment.

Net profit was $98.4 million in the three months ended Nov 30, 2005, compared with $220.7 million in the previous corresponding period, which included an investment income of $128.5 million from the disposal of a substantial portion of the group's interest in StarHub.

However, profit before investment income, which represents the recurring earnings of the media and property businesses, rose 15.5 per cent to $103.05 million from a year ago.

Group operating revenue for the quarter dropped 1.6 per cent to $261.2 million due to the cessation of the operations of broadcasting unit SPH MediaWorks in January 2005.

With continued growth in the economy, SPH said operating revenue for the newspaper, magazine and property segments registered year-on-year growth. Despite the closure of free newspaper Streats since January 2005, revenue for the newspaper and magazine segment was up 2.2 per cent to $235.3 million.

The property segment saw operating revenue increase 13.3 per cent to $24.0 million.

Total operating expenses fell 10.2 per cent to $160.5 million, largely attributable to cost savings with the end of SPH MediaWorks's operations. Newsprint cost was up 7.2 per cent because of higher prices, while total staff cost was 2 per cent lower. The group's headcount fell to 3,471 at the end of November 2005 from 3,816 a year ago.

Group investment income was $19.5 million in the first quarter, down from $152.7 million in the previous corresponding quarter which had included gains from the disposal of the StarHub stake.

Giving the outlook for the rest of the financial year, SPH chief executive officer Alan Chan said: 'The positive sentiment over the economic growth momentum in Singapore will continue to have a favourable impact on the group's advertising revenue in the near term.'

'However, persistent global concerns such as pressure on oil prices and interest rates, and risk of avian flu pandemic might have a dampening effect on the pace of growth in the Singapore economy in the medium term,' he said.

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

SPH shares fell 6 cents to $4.30 yesterday. The stock is unchanged since the start of the year, against a 2.6 per cent gain in the benchmark Straits Times Index.