SPH Net Profit Dips to $97.5m in First Quarter (ST)

BackJan 11, 2012

Property and exhibition businesses cushion drop in print earnings

NET profit at media group Singapore Press Holdings dipped 4.7 per cent to $97.5 million in the first quarter ended Nov 30 due mainly to a drop in newspaper and magazine earnings and a sharp fall in investment income.

However, group operating revenue rose 4.3 per cent to $332.4 million over the last year, boosted by property and the Internet and exhibition businesses.

The main component of group operating revenue is newspaper and magazine revenue, which is closely linked to the performance of Singapore's domestic economy. That declined 1.2 per cent to $262.3 million. Print advertisement revenue of $203.7 million was lower by 1.2 per cent while circulation revenue was down 1.8 per cent to $50.3 million.

Cushioning the fall was property revenue, up by 27.2 per cent to $46.9 million.

Clementi Mall, which officially opened early last year, contributed $9 million in rental income while Paragon's rental income rose 2.6 per cent, or by about $1 million, on the back of higher rental rates. Both malls are fully leased and are expected to provide a steady stream of income for the group.

Revenue from other businesses jumped 41.8 per cent to $23.3 million. This increase was due to income from newly acquired shows in the exhibition business.

SPH said investment income slumped 90.3 per cent to about $587,000 for the three months to Nov 30 compared with a year ago, partly due to unrealised foreign exchange losses on investments arising from financial market volatility.

On the cost front, SPH also faced increasing cost pressures with newsprint prices up 4.2 per cent, or about $1.1 million, although the impact was partially cushioned by a favourable exchange rate.

Staff costs increased by $1.3 million, or about 1.5 per cent, due to salary increments partly offset by a reduced variable bonus provision.

Other operating expenses rose by $7.9 million, mainly from the start of Clementi Mall operations, costs incurred for newspaper subscription drives and higher overheads.

Chief executive Alan Chan said in a statement: "The outlook for the global economy remains fraught with uncertainties. The group will strive for a sustained performance in the core newspaper business while pursuing growth in business adjacencies."

Net asset value per share was $1.44 as at Nov 30 last year, up from $1.39 as at Aug 31 last year while first-quarter earnings per share was six cents, unchanged from a year ago. SPH shares rose three cents to $3.70 yesterday.