SPH reports first quarter net profit of $73m

Profit recognised from the Sky@eleven development cushioned reduced profits from the print media. -SPH

Jan 12, 2009

Singapore Press Holdings Limited (SPH) today reported its results for the first quarter ended 30 November 2008. Recurring profit increased 1.0% to $127.8 million, as profit recognised from the Sky@eleven development cushioned reduced profits from the print media business. Following the global financial market meltdown during the quarter, the Group’s investment portfolio was marked down to market levels, resulting in a loss of $33.7 million. Net profit consequently decreased by 34.8% to $73.0 million from $111.9 million in the corresponding quarter last year.

Group operating revenue was 9.0% or $28.2 million above that of the corresponding quarter last year. Revenue for the Newspaper and Magazine segment, impacted by the sharp downturn in the economy, decreased $11.9 million or 4.6%. Led by the fall in recruitment advertisements, print ad sales declined by 7.3% to $188.2 million. Revenue for the Property segment rose 86.3% to $81.1 million, with Sky@eleven and Paragon contributing $34.6 million and $2.7 million respectively to the increase.

Total operating expenses increased by $26.6 million or 14.1% to $215.2 million. Property development costs of $14.4 million for Sky@eleven, recognised on percentage-of-completion basis, were higher by $9.7 million. Newsprint costs increased $6.3 million or 21.3%, while staff costs decreased $1.7 million or 2.1% as a result of lower variable bonus provision. Depreciation and other operating expenses were up $2.1 million (14.2%) and $9.5 million (23.0%) respectively, in tandem with the Group?s upgrade of its printing presses and expansion of business activities.

Commenting on the outlook for FY2009, Mr Alan Chan, Chief Executive Officer of SPH, said: “The economic downturn is expected to last for several quarters and this will continue to impact the Group’s advertising revenue. We have taken measures to enhance revenue and contain costs, and will proactively implement further cost and efficiency initiatives. Our property segment is expected to contribute significantly to the Group’s recurring earnings with profits from Sky@eleven and Paragon. Barring unforeseen circumstances, the Directors expect the recurring earnings for the current financial year to be satisfactory.”

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