SPH second-quarter net profit up 30% (ST)

BackApr 14, 2010

A STRONG rebound in newspaper and magazine advertisements has led to a jump in profits for media group Singapore Press Holdings (SPH).

Singapore's biggest newspaper publisher posted $113.3 million in net profit for the three months to Feb 28, a 30.2 per cent increase compared to the same quarter a year earlier.

Group operating revenue climbed 11 per cent to $318.7 million in the three- month period, SPH said yesterday in releasing its second-quarter results.

This means that for the first half of SPH's current financial year, net profit surged 61.2 per cent to $258 million. Operating revenue was up 7.2 per cent to $672.7 million.

The rise in second-quarter profits was fuelled by the group's core newspaper and magazine segment, which rallied as the economy recovered. Revenue in this segment rose 8.8 per cent to $222.6 million, SPH said.

A large part of that came from a pick- up in display and recruitment ads in the quarter, which pushed up revenue from print advertisements by 13.3 per cent to $165.4 million. Circulation revenue, however, dipped by $1.6 million, in line with fewer circulation copies sold, said SPH.

SPH chief executive Alan Chan said: 'The positive trend in our print advertising sales has continued into the second quarter, and this has enabled us to deliver a strong set of results for the first half of the 2010 financial year.'

He added: 'We will continue to monitor cost levels closely while at the same time devote resources to optimise and grow our core businesses and invest selectively in adjacent businesses.'

SPH's total operating expenses declined by 1.1 per cent in its second quarter to $193.5 million, largely owing to a drop of almost 40 per cent in newsprint costs.

This was partly offset by a 20 per cent rise in staff costs, as a result of higher variable bonuses for employees. But this increase came from a low base: the provision for bonuses was lower last year due to the recession, SPH said.

Property development costs also rose in the second quarter, as the construction of the group's Sky@eleven condominium project progressed. The development is expected to receive its temporary occupation permit in the coming months.

Overall, SPH's property segment did well. Revenue was up 18 per cent to $85.2 million in the second quarter, due to higher revenue from Sky@eleven and higher rental income from its Paragon mall.

The group gave an update on its recently acquired Clementi Mall, saying it expects to receive the property from HDB in August. Mall operations are anticipated to start in the first half of next year.

For the second quarter, recurring earnings rose 35.8 per cent to $127.5 million.

SPH recorded net investment income of $3.5 million, a turnaround from a loss of $107,000 in the same period a year earlier.

Earnings per share for the group's second quarter came to seven cents, up from five cents in the same period a year earlier. Group net asset value per share was $1.29 as at Feb 28, a marginal increase from $1.28 as at Aug 31.

SPH has declared an interim dividend of seven cents a share to be paid on May 21. Its directors expect the overall performance of the group for this financial year to be 'satisfactory', barring unforeseen circumstances.

The results were announced after the market closed. SPH shares ended one cent lower at $3.93 yesterday.