SPH still holds $150m in Section 44 tax credits - Dec 07, 2004 (ST)

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The Straits Times / The Business Times News On SPH

SPH still holds $150m in Section 44 tax credits

By Bryan Lee
Dec 07, 2004
The Straits Times

MEDIA group Singapore Press Holdings (SPH) still holds $150 million in Section 44 tax credits, which may be icing on the cake for shareholders when the company pays out future dividends.

Section 44 tax credits are accounting entries of how much tax a company has paid for its profits under a former tax system that will expire in 2007.

Until end-2007, these credits can be used to refund shareholders taxes paid on dividends if their personal income tax rates are lower than the corporate rate.

SPH chairman Lim Chin Beng disclosed the figure yesterday at SPH's annual general meeting (AGM), but did not say when and how the company will use up the remaining credits.

Earlier this year, SPH said it will use up $256 million worth of tax credits when it carried out a share reduction exercise which paid out about $1 billion to its shareholders. It previously had $420 million of credits.

During the AGM, which lasted less than an hour, Mr Lim also disclosed that SPH has made a profit of $129 million from selling most of its stake in StarHub as part of the telco's initial public offer launched in September.

On how the merger of its television business with rival MediaCorp will benefit its bottom line, chief executive Alan Chan said that due diligence is still being carried out and so 'we cannot predict a number till all the accounting has been finalised'.

'But as you may be aware, each year we lose some $40 million in our TV operations. So going forward, that will not appear anymore in our books.

'As for the profitability of the joint venture, you have to give some time to the board of directors and the joint-venture company to work out the programming scheme before we can make any educated view on the profitability of the joint venture.'

Mr Chan added that a decision has been made on whether Channel i will continue to air after the merger. But he did not disclose the decision. An announcement will be made soon, he said.

Mr Lim also took time to allay concerns regarding a slide in SPH newspapers' share of Singapore's advertising market.

'The percentages show market share but not profits. I suspect the yield of MediaCorp and Today is very low because the Nielsen survey does not take into consideration the discounted rates that they have.'

SPH's board and management will continue to make the company's products more attractive to readers and advertisers, he said.

On expanding overseas, he said SPH will continue to be careful as market conditions are different overseas and the newspaper business is a politically sensitive one. 'That is why we have gone into the magazine business in Thailand, Malaysia, Indonesia and China.' Those forays will, however, prepare SPH for a future move into the newspaper business in those markets if good opportunities arise.

Mr Lim also paid tribute to outgoing directors Michael Fam and Tang I-Fang for their long service since the SPH board was formed in 1984.

In a separate announcement, SPH said Mr Sum Soon Lim will take over from Mr Tang as chairman of the board's audit committee.