SPH earnings top forecasts with 9.3% rise in Q2 - Apr 12, 2005 (BT)

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The Straits Times / The Business Times News On SPH

SPH earnings top forecasts with 9.3% rise in Q2

Profit hits $97.6m as revenue from core ops rise 5.6% to $203m.

By Wong Wei Kong
Apr 12, 2005
The Business Times

MEDIA group Singapore Press Holdings yesterday reported a 9.3 per cent rise in net earnings for its second quarter, beating market forecasts.

Net profit for the three months ended Feb 28 rose to $97.6 million from $89.3 million in the year-ago period. Earnings per share rose to 6 cents from 4 cents. Analysts polled by Reuters had expected Q2 earnings to fall by almost 9 per cent to about $80.5 million.

Group turnover increased 3 per cent to $234.9 million, boosted by revenue from the core newspaper and magazine operations which rose 5.6 per cent to $203.3 million, and the property division, which saw revenue increase 7 per cent to $22.4 million. This was partially offset by lower revenue from broadcasting and multimedia, which fell 37.3 per cent to $9.2 million as a
result of the cessation of broadcasting operations on Jan 1.

For the half year ended Feb 28, SPH's net profit rose to $319.2 million from $173.0 million a year ago, boosted by a $128.5 million gain from the sale of most of the group's stake in StarHub. Group turnover increased 6.8 per cent in H1 to $500.3 million.

SPH declared an interim net dividend of 7 cents per share, comprising 3 cents of normal dividend and 4 cents of special dividend, to be paid on May 10.

Profit from operations in Q2 increased 12.1 per cent to $89.9 million in Q2. Total operating expenses fell 2.5 per cent to $147.0 million, partly attributable to cost savings with the end of broadcasting operations. Newsprint costs, however, increased 12 per cent as a result of higher prices. The total headcount fell to 3,461 at end-February from 3,539 a year previously.

Group investment income for the quarter almost doubled from a year ago to $45.3 million, due largely to higher profits from the sale of investments and income from the capital reduction of an investee company.

SPH said it expects the operating performance of the group for the current financial year to be satisfactory. 'The outlook for the group's newspaper advertising revenue is expected to be in line with economic growth for the year 2005,' said CEO Alan Chan. 'There are signs of improving sentiment in several business sectors. Generally, consumer and business sentiments in Singapore will continue to be influenced by global economic factors such as high oil prices.'

The Q2 results included an exceptional loss of $13.2 million from charges associated with the merger of the group's free-to-air television broadcasting and free newspaper operations with rival MediaCorp. SPH MediaWorks, the group's broadcasting arm, turned in an operating profit of $1.7 million, due to a shorter period of transmission and the cessation of broadcasting operations. MediaWorks was placed under liquidation on Feb 4.

According to Reuters estimates, analysts expect net profit of $445 million for SPH in the full year ending August 2005, down from $546 million in the previous year when profit was boosted by the sale of a telecoms investment.

SPH shares closed up 4 cents yesterday at $4.50.