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SPH Posts Q1 Net Profit of $102m (ST)

BackJan 15, 2011

Drop of 29% from a year ago, but print ad revenue rises 13%

BY FIONA CHAN
ASSISTANT MONEY EDITOR

MEDIA group Singapore Press Holdings (SPH) has posted a first-quarter net profit of $102.3 million.

This is a drop of 29.3 per cent from the same period a year ago, mainly because last year's numbers included profits from SPH's condominium project Sky@eleven, the group said in a press statement yesterday. Group operating revenue for the three months to Nov 30 was down 10 per cent to $318.7 million. But excluding Sky@eleven, it would have improved 12.3 per cent.

As more people took out print advertisements in SPH's publications, profits from the newspaper and magazine segment were boosted by 9.2 per cent to $265.5 million.

Print advertisement revenue grew by 13.1 per cent to $206.3 million in the quarter from a year ago. But fewer copies sold meant that circulation revenue dropped by 2.1 per cent, or $1.1 million.

Chief executive officer Alan Chan said yesterday that the group's advertising revenue will "continue to track the Singapore domestic economy", which is "expected to grow at a modest pace".

He also gave an update on SPH's latest property, Clementi Mall. Stores on the lower levels have already begun business and full tenancy commitment is expected when the mall officially opens in April, he said.

Rental income from the group's other mall, Paragon, rose by 26.1 per cent, or $7.5 million, in the quarter. The improvement stemmed partly from rental revisions and a larger floor area after the building's facade was enhanced.

Still, without Sky@eleven, operating revenue for SPH's property division in the quarter fell 63 per cent from a year ago to $36.8 million.

On the bright side, SPH, which publishes The Straits Times, incurred no property development costs in its first quarter, compared with costs of almost $20 million in the same quarter a year ago.

However, some other costs went up.

Materials, consumables and broadcasting expenses rose about 15 per cent, due to higher newsprint and other production costs. The group expects newsprint prices to continue increasing moderately this year, on the back of cost pressures and rising demand.

Staff costs also climbed by about 16 per cent because of higher provisions for variable bonuses and partial wage restorations after previous pay cuts.

SPH's investment income for the quarter fell about 40 per cent to $6.1 million, mainly due to lower fair value gains.

First-quarter earnings per share was six cents, down from nine cents a year ago. But group net asset value per share was $1.46 as at Nov 30 last year, up from $1.39 as at Aug 31 last year.