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SPH Profit Dips On Lower Property Flows (ST)

BackApr 14, 2011

MEDIA group Singapore Press Holdings (SPH) has reported a 33.5 per cent drop in net profit for the quarter due to the completion of the Sky@eleven condominium project last year.

Net profit for the three months to Feb 28 came in at $75.4 million, compared with $113.3 million in the same period a year ago.

SPH has declared an interim dividend of seven cents per share, to be paid on May 24.

With the completion of the Sky@eleven project, revenue from its property division was lower at $39.5 million, the group said yesterday. Group operating revenue fell 9.7 per cent, to $287.8 million, for the second quarter of the financial year.

But excluding the Sky@eleven effect, SPH's group operating revenue in the quarter would have risen 7.7 per cent instead, with better showings across all business segments.

Still doing well is the group's core newspaper and magazine division, which publishes The Straits Times.

Operating revenue in this segment climbed 5.2 per cent to $234.3 million for the second quarter, SPH said.

Revenue from print advertisements, in particular, increased by 6.6 per cent to $176.3 million, driven by a jump in display and recruitment ads.

Circulation revenue held steady at $50.3 million, said the group.

Within SPH's property division, its luxury mall Paragon in Orchard Road drew in 12.9 per cent more rental income in the quarter compared with the amount a year ago.

This was due to higher rental rates and an increase in floor area after the building's facade was enhanced.

SPH's other property, Clementi Mall near Clementi MRT station, contributed revenue to the group for the first time since its acquisition in November 2009. The mall began its first phase of operations in January this year.

On the cost front, SPH recorded a 15.3 per cent rise in newsprint costs and an 8.3 per cent increase in staff costs, mainly because the group paid out higher salaries and hired more people to support new businesses and initiatives.

For the first half of its current financial year, SPH's net profit fell 31.1 per cent to $177.7 million.

Operating revenue dipped 9.8 per cent to $606.5 million in the six-month period, which ended on Feb 28.

Excluding Sky@eleven, operating revenue would have increased by 10 per cent for the period, SPH said.

Revenue from the group's newspaper and magazine segment climbed 7.3 per cent to $499.8 million for the six months.

But the property division lost 58.7 per cent in revenue, down to $76.3 million for the period.

Mr Alan Chan, SPH's chief executive officer, said the group's results for the first half were 'bolstered by strong regional activities and the continuing recovery of the Singapore economy'.

'The group's print advertisement revenue is expected to move in tandem with the performance of the Singapore domestic economy,' he said in a statement.

The outlook for the economy remains positive, barring any global shocks, Mr Chan added.

He also said that Paragon and Clementi Mall are both fully leased 'and are expected to contribute a steady stream of rental income to the group'.

SPH's earnings per share eased by two cents in the second quarter from a year ago, falling from seven cents to five cents.

Net asset value per share for the group also dropped to $1.32 as of Feb 28, from $1.39 as of Aug 31.

The counter closed two cents higher at $3.98 yesterday. The results were announced after the market closed.