SPH Q3 profit dips 5% to $126.7m (BT)

BackJul 14, 2009

MEDIA group Singapore Press Holdings (SPH) yesterday said net profit for the quarter to May 31 fell 5 per cent to $126.7 million from $133.4 million a year ago.

Revenue from its core newspaper and magazine division fell 17.4 per cent to $222 million from $268.9 million a year ago, as print ad sales fell 23.3 per cent to $159.5 million, led by the fall in recruitment and display advertisements. Earnings per share remained flat at eight cents.

However, SPH's property division reported 40 per cent higher sales, or $94.4 million against $67.3 million.

SPH said staff costs fell 18.9 per cent as a result of pay cuts instituted in April and a decrease in bonuses, as well as a $3.4 million grant under the government's Jobs Credit scheme.

Headcount rose slightly to 3,971 as at end-May, from 3,874 a year ago. Total operating expenses fell by $12.8 million or 6 per cent to $199.9 million.

For the first nine months of the year, net profit fell 16.9 per cent to $286.8 million from $344.9 million.

Sales were largely flat at $963.7 million but operating revenue from its newspapers and magazines was down almost 12 per cent to $675.9 million.

For the nine-month period, SPH lost $16.2 million on the value of its investments, due mainly to a $30.6 million loss in the value of its externally managed funds, which was offset by dividend and interest income.

SPH said performance of its investment portfolio will continue to be affected by financial market volatility and that it will continue to be conservative in allocating assets.

Of the roughly $900 million in its group investible fund, 44.4 per cent is in cash and deposits, with 28.7 per cent in equities and 14.2 per cent in bonds. Just under 13 per cent were placed in investment funds.

SPH said advertising revenue was expected to move in tandem with the performance of the economy.

Chief executive officer Alan Chan said: "Despite early signs that the decline in global demand is levelling out, the timing and extent of the economic recovery remain unclear. The threat of the Influenza A (H1N1) pandemic further clouds visibility on business conditions."

SPH said that newsprint charge-out rates should remain high for the rest of the year with some moderation expected in FY 2010.

For the first nine months in FY 2009, newsprint costs jumped 18.7 per cent to $101.3 million from $85.3 million a year ago.

For its property segment – Paragon shopping mall along Orchard Road and the Sky@eleven residential project – "profits . . . are expected to contribute significantly to the group's recurring earnings", SPH said.

"Paragon provides a stable, recurrent income stream (while) the group will continue to progressively recognise profit from Sky@eleven, which is on track to obtain (its Temporary Occupation Permit) in FY 2010."

Mr Chan said: "As trading conditions are expected to remain uncertain, we will continue to be vigilant in managing our costs, growing our revenue and maintaining a strong balance sheet."