SPH Posts Record Full-year Operating Profit (ST)

BackOct 13, 2010

A REBOUND in advertisement sales and strong property earnings have helped deliver stellar full-year results for Singapore Press Holdings (SPH).

The media and property group's net profit climbed 18 per cent to $497.9 million for the year ended Aug 31, and both its revenue and operating profit hit new highs.

Revenue rose to a record $1.38 billion, while full-year operating profit topped $539.1 million, also a new peak.

The bumper results mean that SPH shareholders can look forward to a final dividend of 20 cents per share, comprising a normal dividend of nine cents and a special dividend of 11 cents. When SPH's interim dividend paid in May is included, total dividend payout for the full year amounts to 27 cents – two cents more than a year ago.

"Our overall performance this year has been a big improvement over that of the previous year," SPH chairman Tony Tan told reporters at a media briefing yesterday.

Dr Tan put the group's robust gains down to a recovery in SPH's newspaper advertising revenues and the last batch of profits from the company's Sky@eleven condominium development.

Print advertisement revenues jumped 13.1 per cent to $733.1 million, more than offsetting the $5.1 million, or 2.4 per cent, slide in circulation revenue.

Total revenues from the newspaper and magazine segment were ahead almost 10 per cent to $974 million – an achievement highlighted by Dr Tan and Mr Patrick Daniel, editor-in-chief for SPH's English and Malay Newspapers Division.

"Fortunately for us, the newspaper business and print business are still alive and well in Singapore, and we're optimistic that this will continue to be so for some years to come. But we must not be complacent and rest on our laurels; we will continue to investigate new business areas," said Dr Tan.

"We are conscious about the changes in the media industry, and that's why... we have invested a lot in the Internet as well as the new media."

Newsprint costs dropped 29 per cent for the full year from a year earlier, but SPH warned that it expected prices to rise this year due to imbalances in supply and demand.

The group's property segment turned in a slightly lower revenue of $356.1 million for the full year, down 2.6 per cent from the previous year due to lower contributions from Sky@eleven, which obtained its temporary occupation permit in May.

But SPH said its rental income rose by 9.2 per cent or $11.3 million, mainly because of its luxury mall Paragon, which received a facelift and gained more retail space during the year.

Clementi Mall, which an SPH-led consortium acquired in November last year, is due to open next year. Its basement and first level are expected to be ready in January, just before Chinese New Year, with the rest of the mall to follow in March.

In response to a question about how the cessation of Sky@eleven's contributions and the addition of Clementi Mall would affect SPH's figures next year, chief executive Alan Chan flagged a number of key differences between the two properties.

Sky@eleven was built on land SPH acquired inexpensively a few decades back, so profits from that development would be "much greater" than those of Clementi Mall, which SPH won in a competitive tender, he said.

And Mr Chan noted that Sky@eleven was a one-off development project where profit was reflected over a period of four years. In contrast, Clementi Mall was expected to earn profits over the lifetime of its 99-year lease.

Looking to the future, Mr Chan said the group's print advertisement revenue was "expected to move in tandem with the performance of the Singapore domestic economy".

Earnings per share increased to 31 cents for the year to Aug 31, from 26 cents for the previous year.

Group net asset value per share climbed to $1.39 as at Aug 31, up from $1.28 a year ago.