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SPH's Net Profit Rises By 11.6% (ST)

BackApr 14, 2012

Jump in rental income in second quarter

HIGHER rental income helped media group Singapore Press Holdings post an 11.6 per cent jump in net profit for the second quarter.

Earnings came in at $84.1 million for the three months to Feb 29, while operating revenue gained 3.7 per cent to $298.5 million, from the same period a year ago.

Net profit for the six months to Feb 29 increased by 2.2 per cent to $181.6 million as operating revenue rose 4 per cent to $630.9 million year-on-year.

Turnover for the second quarter from the newspaper and magazine business, the main component of SPH revenue, remained flat at $234.5 million, inching up 0.1 per cent.

Print advertisement revenue grew 0.8 per cent to $177.6 million, offsetting a 1.1 per cent fall in circulation revenue to $49.7 million.

While newsprint costs went up 3.5 per cent, that was "cushioned by a favourable exchange rate", SPH said.

It noted that staff costs fell 0.3 per cent, or by around $300,000, due to lower variable bonus provision partially offset by salary increments.

Rental income leapt 21.6 per cent to $48 million. Rent from Clementi Mall, which officially opened early last year, totalled $9.2 million while Paragon's contribution rose 1.7 per cent, or about $700,000, on the back of higher rates.

SPH said the two properties are fully leased and expected to provide a steady income stream.

"The group's property portfolio was further enhanced with the award of the tender of the Sengkang commercial site," it added.

SPH won a 99-year leasehold commercial site in Sengkang with its joint venture partner United Engineers in January, with a bid of $328 million.

Operating revenue from SPH's other units grew 12.9 per cent to $15.9 million, mainly from its Internet business.

SPH's share of net profits of associates and jointly controlled entities was $2.4 million, a reversal from the $216,000 loss in the second quarter of last year.

This included profits from MediaCorp Press, MediaCorp TV Holdings and OpenNet, and losses from its other media investments, SPH said.

SPH has a 40 per cent stake in MediaCorp Press and a 20 per cent stake in MediaCorp TV Holdings.

Costs arising from newspaper subscription drives and Clementi Mall operations brought other operating expenses up by 6.3 per cent to $57.9 million.

Materials, consumables and broadcasting costs rose a marginal 0.2 per cent to $38.5 million.

Investment income of $4.4 million was 57.4 per cent lower than in the second quarter of 2011 due to a reversal of provision for loss on derivative financial instruments last year.

Chief executive Alan Chan said in a statement: "The group's print advertisement revenue will continue to move in tandem with the performance of the Singapore domestic economy.

"Amid the uncertain economic outlook, the group will continue to seek business opportunities for future growth while striving to sustain its core newspaper business."

Earnings per share for the quarter was five cents, unchanged from the same period a year ago, while net asset value per share was $1.34 as at Feb 29, down from $1.39 as at Aug 31.

It proposed an interim cash dividend of seven cents per share, payable on May 23. The books closure date is May 10.

SPH shares closed flat at $3.89 yesterday.

melissat@sph.com.sg

On the property side, rental income leapt 21.6 per cent to $48 million. Rental income from Clementi Mall, which officially opened early last year, was $9.2 million while Paragon's (left) contribution rose 1.7 per cent, or about $700,000, on the back of higher rental rates. SPH said the two properties are fully leased and are expected to provide a steady recurrent income stream.