SPH profit up a robust 29.9% in Q3

Rise due to rebound in ad sales, higher contribution from property segment

SINGAPORE Press Holdings (SPH) reported a 29.9 per cent increase in its net profit for the third quarter on the back of a strong rebound in advertising sales and higher contribution from its property segment.

Earnings for the three months ended May 31 stood at $165 million, up from $127 million in the same period a year ago, the group said yesterday.

This translated to earnings of 10 cents per share for the quarter, against earnings of eight cents per share a year ago.

Recurring earnings grew 34.7 per cent to $177 million from a year ago, buoyed by better performance in the group’s newspaper and magazine segment.

With a rebound in advertising sales, revenue from the segment rose 19.8 per cent to $266 million.

Print advertisement revenue was up 28.1 per cent to $204 million, thanks to higher sales in advertisement categories such as recruitment.

Circulation sales, however, dipped 3.1 per cent for the quarter to about $53 million.

Revenue from its property segment jumped 43.4 per cent to $135 million, due to higher revenue from Sky@eleven – which secured its temporary occupation permit in May – and the increase in rental income from Paragon.

But the media group also posted a 33 per cent drop in investment income to $11.7 million compared to a year ago. The income mainly comprised dividend and interest income.

Property development costs of $28.1 million were recognised for Sky@eleven, up 54.3 per cent.

Staff costs increased by 36.1 per cent to $96.4 million due to higher variable bonus provision in line with the improved profits from the newspaper business and lower government jobs credit grant received this year.

This was also met by a 14.6 per cent decline in materials, consumables and broadcasting costs to $38.8 million, thanks largely to lower newsprint costs.

As in the previous corresponding quarter, no dividend was declared for the period.

For the nine months, net profit surged 47.4 per cent to $423 million. Recurring profits stood at $464 million, up 31.4 per cent compared to the nine-month period a year ago.

Operating revenue of the newspaper and magazine segment rose 8.3 per cent to $732 million.

Print advertisement revenue rose 11.8 per cent to $552 million, while circulation revenue dipped 2.4 per cent to about $157 million.

Investment income for the nine-month period swung into the black to $25.4 million, compared to an investment loss of $16.2 million a year ago.

‘Our print advertisement revenue and profit from our core newspaper business have rebounded strongly, in tandem with the economic recovery,’ said SPH chief executive Alan Chan.

SPH remains committed to developing its digital and interactive media businesses, he added.

Barring unforeseen circumstances, the directors expect the group’s overall FY2010 performance to be better than that of the previous financial year.

SPH shares gained four cents yesterday, or a shade over one per cent, to close at $3.93.

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