SPH Posts $389m in Full-Year Profit (ST)

BackOct 13, 2011

Fall of 22% largely due to absence of one-off gain from condo project

STRONG advertising sales and rental income helped Singapore Press Holdings (SPH) record another solid set of full-year results.

The media and property group posted $388.6 million in net profit for the year ended Aug 31, down 22 per cent on the $497.9 million racked up a year ago.

The earnings decline was largely due to the $154 million in profit recorded the previous year from SPH's condominium project Sky@eleven, which has since been completed.

The Sky@eleven boost was also mainly why group operating revenue slid 9.4 per cent to $1.25 billion for the year.

But it was still the seventh consecutive year the figure has exceeded $1 billion, said SPH acting chairman Cham Tao Soon.

"Our creditable performance was underpinned by higher advertisement revenues, robust growth in rental income and continued progress in our exhibitions and online businesses," he said at a briefing yesterday.

The flagship newspaper and magazine business continued to perform well, with operating revenue up 4 per cent, or $39 million, to $1.01 billion.

Professor Cham said that despite competition from online and other media platforms, total newspaper circulation held its ground, ceding just 0.2 per cent.

But the average daily circulation for the firm's biggest newspaper, The Straits Times, rose by 0.6 per cent to 354,654 copies, while The Business Times rose by 1.5 per cent. Tamil Murasu surged 15.3 per cent to 16,747 copies.

Print advertisement revenues rose by $41.6 million, boosted by strong display ad sales. Circulation revenue fell slightly by $1.9 million.

Property rental income, mainly from Paragon and the newly opened Clementi Mall, soared 24.9 per cent to $167.9 million.

Clementi Mall, which opened in May, is fully occupied and contributed $18.4 million in rental income.

Operating revenue from the group's other businesses, including exhibitions and digital media, jumped 37.3 per cent to $69.8 million.

The good set of results means shareholders will receive a final dividend of 17 cents, comprising a normal dividend of nine cents and a special dividend of eight cents.

Combined with the interim dividend paid out earlier, total dividend payout for the year will be 24 cents a share.

Earnings per share fell seven cents from the previous year to 24 cents, while net asset value held steady at $1.39.

Chief executive Alan Chan said SPH will continue to look for investment properties but is likely to focus on managing shopping malls.

"The expertise of SPH really lies in mall management, mainly Paragon and Clementi Mall. So going forward, we will be looking for more of these shopping malls to acquire," he said.

He also addressed a question about the long-term prospects of the core newspaper business, given that newspapers in developed countries are seeing falling circulation.

Mr Chan noted that despite the fact that there are many media platforms and choices for advertisers, SPH's newspapers provide a compelling case for the advertising dollar.

"We are very efficient. The Straits Times, for example, reaches 1.4 million readers every day. And once you buy one ad in The Straits Times, you reach out to almost everyone who matters," he said.

"This is an area we will defend vigorously."

For the next year, Mr Chan said the "outlook remains uncertain amid global economic woes".

"The group will continue to leverage on its key strengths and synergies to deliver shareholder value. Print advertisement revenue will continue to move in tandem with the performance of the Singapore domestic economy," he said.

SPH shares closed four cents higher at $3.78 yesterday.