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SPH posts full-year profit of $422m (ST)

BackOct 13, 2009

Net profit dips 3.6% in downturn but beats market expectations




MEDIA group Singapore Press Holdings (SPH) weathered the economic storm well during its last financial year, surprising markets with a better-than-expected net profit of $421.9 million.

The profit for the year to Aug 31 was down just 3.6 per cent on the previous year, trumping market expectations of a return of $395.7 million, according to a Bloomberg poll of three analysts.

SPH chairman Tony Tan noted yesterday that the 2009 financial year had been tough, with the global economy witnessing its deepest recession in 50 years and many companies suffering large losses.

"Given the circumstances," he said, "SPH did well, with FY 2009 profit just a shade below that of FY 2008."

Dr Tan reported that SPH had been quick to adopt pre-emptive measures to buffer itself against the impact of the economic downturn.

"We cut wages, operation costs and budgets across the board. These helped SPH to weather the financial storm and maximise shareholders' value," he said.

Recurring profit dipped 0.9 per cent to $497 million – a tad lower than the $501.7 million reported last year. And group revenue held steady at $1.3 billion, a figure comparable to the record revenue seen last year.

The downturn sent revenue from its newspaper and magazine arm falling 12 per cent to $892.4 million, with print ad sales down 16.9 per cent to $648.3 million. Circulation revenue rose 4.1 per cent to $214.2 million.

Circulation of Singapore's biggest English daily, The Straits Times, fell 2.8 per cent. The decline occurred during a period of economic downturn and in a year which saw its weekday cover price rise by 10 cents and its Saturday edition price by 20 cents.

The property division cushioned most of the slide in the newspaper and magazine business, with its revenue jumping 43.2 per cent to $365.6 million, as contributions from its Sky@eleven condominium and Paragon shopping mall rose.

Asked about plans to venture further into property, Dr Tan said: "We've derived considerable experience in the property field now. We're always looking for new avenues to augment our profits, and we'll look at opportunities again as they arise."

Revenue from SPH's other businesses surged 38.2 per cent to $43.4 million, as its Internet business and units providing events management and investor relations services grew.

Total operating expenses were up 0.4 per cent to $818 million, with newsprint costs rising 9.3 per cent to $126.8 million.

Staff costs dived 13.9 per cent to $286.9 million as a result of pay cuts implemented from April, lower provision for bonuses and a grant from the Government's Jobs Credit scheme.

The group saw a net loss of $6.2 million on its investment portfolio, due mainly to a $30.5 million slide in the value of its externally managed funds and impairment, foreign exchange and derivative losses.

SPH chief executive Alan Chan said that business outlook remained uncertain, although there were signs of a gradual recovery.

"Our advertisement revenue, which saw some improvements in recent months, is expected to move in tandem with the economy," he added.

New products launched during the year included the free news website Straits Times Breaking News.

Other highlights included the acquisition of popular financial portal Shareinvestor.com and the unveiling of a $45 million facelift for Paragon, giving it a fresh facade, extended floor space and new tenants.

Earlier this year, SPH launched a new warehouse to store newsprint at an optimal level.

Earnings per share came to 26 cents – down from 27 cents a year ago – while net asset value was down from $1.30 previously to $1.28.

A final dividend of 18 cents per share is to be paid on Dec 23, bringing the total dividend paid this year to 25 cents, two cents lower than last year.

Prior to the results announcement, SPH shares closed six cents up at $3.88 yesterday.

alfoo@sph.com.sg


BELT-TIGHTENING
"We cut wages, operation costs and budgets across the board. These helped SPH to weather the financial storm and maximise shareholders' value."
SPH chairman Tony Tan



TIED TO GROWTH
"Our advertisement revenue, which saw some improvements in recent months, is expected to move in tandem with the economy."
SPH chief executive Alan Chan