SPH Posts 13% Fall in Q3 Profit (BT)

BackJul 14, 2012

Creditable show by media, property businesses but results hit by lower investment income

SINGAPORE Press Holdings (SPH) saw a creditable performance from its media and property businesses for the third quarter ended May 31 but a sharp drop in net investment income amid the financial market volatility resulted in net profit falling 13.1 per cent to $99.8 million.

At the operating level, the recurring earnings of the media and property businesses improved 2.2 per cent year on year to $112.64 million.

The three-month net profit of $99.8 million translates to earnings per share of six cents, down from seven cents for the previous corresponding quarter.

Net income from investments dropped 59.9 per cent to $9.5 million from $23.7 million a year earlier.

Operating revenue for the quarter was up 0.9 per cent year on year at $331.8 million, with a 12.8 per cent rise in property revenue to $48.68 million more than offsetting a 0.6 per cent dip in newspaper and magazine revenue to $261.37 million.

Print advertisement revenue remained stable with a 0.4 per cent increase to $201.8 million but circulation revenue declined 3.6 per cent to $51.8 million.

Operating revenue from the group's other businesses fell 4.1 per cent to $21.8 million due to lower income from SPH's exhibitions business.

For property, rental income from Clementi Mall was up 58.6 per cent at $9.5 million compared with the same period a year ago, during which the mall was not fully operational. Higher rental rates resulted in the group's Paragon property recording a $1.9 million or 5.3 per cent rise in revenue.

Staff costs for the quarter rose 6.8 per cent to $94 million due to salary increments, variable bonus provision and higher headcount from the acquisition of ACP Magazines.

Its other operating expenses were up 7 per cent at $62.8 million due to higher distribution, business promotion and premises costs in line with increased business activity.

However, its materials, consumables and broadcasting costs fell 5.8 per cent to $42 million. The period saw newsprint costs fall $1.4 million or 5.1 per cent as a result of lower print volume.

For the nine months, the group's net profit was down 3.8 per cent at $281.4 million. But recurring earnings were 6.1 per cent up at $323.9 million. Operating revenue climbed 2.9 per cent to $962.7 million.

On the outlook for FY2012, SPH chief executive officer Alan Chan said: "Print advertisement revenue will continue to move in tandem with the performance of the Singapore domestic economy. The group will strive to sustain its core newspaper business while continuing to actively pursue growth opportunities."

"In view of the turbulent financial market conditions, the group has adopted a more conservative portfolio asset allocation and returns are expected to be commensurate with this lower risk profile," Mr Chan said, adding that the group expects FY2012 results to be satisfactory.

SPH shares gained three cents yesterday to close trading at $4.02.