SPH's first-quarter earnings double (ST)

BackJan 14, 2010

MEDIA group Singapore Press Holdings (SPH) saw its first-quarter profit nearly double from a year ago as recurring income soared and investment returns recovered.

Net profit for the three months to Nov 30 last year shot up 98.2 per cent to $144.7 million, up from $73 million in the previous corresponding period.

SPH chief executive Alan Chan said yesterday: 'The directors are pleased with the group's results for the first quarter and, barring unforeseen circumstances, expect overall performance for FY2010 to be satisfactory.'

Group operating revenue rose 4 per cent to $354 million, buoyed largely by a 22.7 per cent increase in revenue to $99.5 million from its property arm. Recurring earnings surged 24.7 per cent to $159.4 million.

SPH noted that operating revenue for its key newspaper and magazine segment dipped 2.5 per cent to $243.2 million, but this has improved in recent months.

Print advertising revenue was 3.1 per cent lower at $182.4 million, due mainly to fewer classified advertisements. Group circulation revenue decreased marginally by $600,000, or 1.1 per cent, in line with fewer copies sold.

In contrast, its property division continued to deliver a robust display on the back of higher revenue from the Sky@eleven condominium project.

SPH also said it booked an investment income of $10.2 million during the quarter, reversing an investment loss of $33.7 million recognised a year earlier during the onset of the global financial crisis.

Total operating expenses dropped by 8.2 per cent to $197.6 million.

Newsprint costs were lower by $13.6 million, or 38.1 per cent, while staff costs fell $1.7 million, or 2.2 per cent, due to wage cuts and the Jobs Credit grant. Total headcount as of November last year remained flat at 3,945.

Last month, SPH said it will restore half of the pay cuts it imposed earlier last year and reward staff with one-off payments due to improving business conditions.

Mr Chan said: 'We will continue to monitor our cost levels closely, while at the same time devote resources and explore opportunities to grow beyond print and Singapore.'

Earnings per share for the first quarter was nine cents, up from five cents a year ago, while net asset value was $1.37 per share as of Nov 30, up from $1.28 as of Aug 31 last year.

Mr Chan said: 'The Singapore economy is expected to grow at a modest pace in 2010. Our advertisement revenue has improved in recent months and is expected to move in tandem with the economy.'

SPH shares closed two cents down at $3.66 before the results were announced.

DMG Research, which kept its neutral call on SPH with a target price of $3.86, noted: 'SPH's attractive FY10 yield of 6.5 per cent would provide support against significant downside risk.'

SPH is the largest listed media company here with 17 newspapers, more than 100 magazines and popular websites such as AsiaOne and Stomp.