SPH – BT

SPH full-year net up 18% on record revenue

Higher ad sales, profits from Sky@eleven boost bottom line

A REBOUND in advertisement sales plus property profits from Sky@eleven helped drive Singapore Press Holdings’ full-year net profit 18 per cent higher to $498 million, from last year’s $422 million.

The group yesterday posted record operating revenue of $1.38 billion for the year ended Aug 31, 2010 – up 6.1 per cent from FY2009’s $1.3 billion. Recurring earnings, too, rose 8.5 per cent to a record $539 million.

Investment income was $39.3 million – a turnaround from last year’s loss of $6.2 million.

‘Overall performance this year has been a big improvement over that of the previous year,’ SPH chairman Tony Tan said at a media briefing.

The board has recommended a final dividend of 20 cents a share – comprising a normal dividend of nine cents and a special dividend of 11 cents – to be paid on Dec 23. Including the interim dividend, the total payout for FY2010 will be 27 cents a share – or 6.4 per cent based on yesterday’s closing share price of $4.22.

Fifteen estimates compiled by Bloomberg had analysts expecting SPH to announce net earnings of about $511.2 million.

Actual earnings per share came in at 31 cents, up from 26 cents a year back. Net asset value per share was $1.39 as at Aug 31, up from $1.28 a year earlier.

Revenue from the core newspaper and magazine segment grew 9.2 per cent to $974.1 million. Print ad revenue surged 13.1 per cent to $733.1 million, but circulation revenue fell $5.1 million due to fewer copies sold.

Dr Tan said: ‘The newspaper and print business is still alive and well in Singapore, and we are optimistic that this will continue to be so for some years to come.

‘But we must not be complacent and rest on our laurels, so we continue to investigate new business areas in new media, as well as in exhibitions, displays, to see what opportunities there may be, including, of course, in property development.’

Revenue from the property division fell 2.6 per cent to $356.1 million in FY2010, as higher rental income from the Paragon complex in Orchard Road was offset by a lower year-on-year contribution from Sky@eleven at Thomson. The condominium development obtained its Temporary Occupation Permit in May and final profit has now been recognised.

Total operating expenses rose due to a 19 per cent increase in staff costs resulting from a higher variable bonus provision, as newsprint costs fell 29 per cent.

Newsprint prices are expected to rise in the coming year, with SPH saying it will monitor these closely. Print advertisement revenue is expected to move in tandem with Singapore’s domestic economy. SPH chief executive Alan Chan said the economic outlook remains healthy, though worries of a double dip still linger.

In the coming year, a new mall in SPH’s portfolio is due to open in two phases between January and March. The group also expects to strengthen Sphere Exhibit’s foray into the MICE sector through new acquisitions, Mr Chan said.

SPH shares closed a cent lower at $4.22 yesterday, before its results announcement was made.

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