SPH – BT

SPH posts Q1 net profit of $102.3m

Drop of 29% mainly due to absence of previous profit from Sky@eleven project

SINGAPORE Press Holdings (SPH) yesterday reported a first-quarter net profit of $102.3 million, a 29 per cent decline mainly because performance in the year-ago quarter was boosted by profit from its Sky@eleven property project.

In Q1 last year, the group posted net profit of $144.7 million that included a $50.3 million profit from its completed Sky@eleven condominium development, whose final profit was recognised in Q4 2010.

Group operating revenue fell 10 per cent to $318.7 million for the three months ended Nov 30, 2010. Again, this was because revenue from Sky@eleven of $70.1 million was recognised in the corresponding quarter last year; excluding which revenue rose 12 per cent. Excluding Sky@eleven profit for Q1 2010, the group’s recurring earnings grew 6.6 per cent, or $7.2 million.

Earnings per share for the first quarter thus fell to six cents from nine cents for the same quarter last year. But net asset value per share at end-November rose to $1.46, from $1.39 at the end of FY2010 on Aug 31 last year.

The core newspaper and magazine segment generated revenue of $265.5 million for the group, 9 per cent up from the same quarter a year ago. More display and recruitment ads drove print advertisement revenue 13 per cent higher to $206.3 million, offsetting the 2.1 per cent dip in circulation revenue as fewer copies were sold.

Under the property division, Paragon generated 26 per cent more rental income for Q1 than it did a year ago, partly due to rental revisions and increased floor area after a facade enhancement.

SPH also said that 85 per cent of Clementi Mall’s retail space has been taken up so far, and stores on the lower levels have opened for business. Full tenancy commitment is expected by the official opening in April.

SPH’s other arms – such as the Internet, outdoor advertising and events management businesses – saw operating revenue rise 46 per cent to $16.4 million.

On the costs front, higher newsprint and other production costs drove materials, consumables and broadcasting costs 15 per cent higher, by $5.4 million. Newsprint prices are expected to rise moderately this year due to cost pressures and rising demand, the group said.

Staff costs rose 16 per cent too, due to higher variable bonus provisions and partial wage restorations. The wage bill for Q1 2010 had been lower, thanks to the Jobs Credit scheme.

SPH chief executive Alan Chan said that the group’s advertising revenue would continue to track the Singapore economy, now expected to grow at a modest pace. The board expects the recurring earnings of SPH’s media and property businesses for the current financial year to be satisfactory.

SPH shares closed flat at $3.98 before its results were announced yesterday.

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