SPH – BT

SPH posts $75.4m Q2 net profit

33.5% profit fall due to condo completion; core business revenue stays healthy

SINGAPORE Press Holdings (SPH) has reported a net profit of $75.4 million for its second quarter ended Feb 28, 2011, a year-on-year fall of 33.5 per cent. This was due to the absence of profit contribution this time round from its Sky@eleven condominium development, which was completed in May 2010.

In Q2 FY2010, recurring earnings included a $36.9 million profit recognition from Sky@eleven.

Operating revenue dropped 9.7 per cent to $287.82 million because of a 53.7 per cent fall in property operating revenue to $39.5 million. Excluding the effect of Sky@eleven revenue of $51.4 million for the second quarter last year (Q2 FY2010), group operating revenue rose $20.5 million (7.7 per cent) with increases across all segments. Operating revenue for the newspaper and magazine segment, the group’s core business, stayed healthy, rising $11.6 million (5.2 per cent) to $234.3 million. Print advertisement revenue increased $10.9 million (6.6 per cent) to $176.3 million, driven by strong showing in display and recruitment advertisements. Circulation revenue held steady at $50.3 million.

Rental income from shopping mall Paragon increased $4.2 million (12.9 per cent) as a result of higher rental rates achieved and incremental rental from the facade enhancement. Clementi Mall also registered its maiden income upon partial commencement of operations in January.

The period saw materials, consumables and broadcasting costs higher by $4.1 million (11.9 per cent), partly due to increase in newsprint costs of $3.1 million (15.3 per cent). Staff costs were up $6.9 million (8.3 per cent) mainly from salary increments and increased headcount to support new businesses and initiatives. Costs for Q2 FY2010 were also lower because of the government jobs credit.

Other operating expenses rose 40 per cent to $54.4 million, partly due to higher premises costs and other overheads. Earnings per share for Q2 fell to five cents from seven cents. An interim dividend of seven cents per share was declared.

For the first half, net profit slid 31.1 per cent to $177.7 million. H1 2010 recurring earnings included Sky@eleven profit recognition of $87.2 million. Operating revenue dipped 9.8 per cent to $606.5 million. Excluding the Sky@eleven $121.5 million revenue effect, group revenue rose $55.4 million (10 per cent).

On the outlook for FY 2011, SPH CEO Alan Chan said: ‘Singapore’s economic outlook remains positive, barring any deterioration arising from global uncertainties. The group’s print advertisement revenue is expected to move in tandem with the performance of the Singapore domestic economy. Our two property assets, Clementi Mall and Paragon, are both fully leased and are expected to contribute a steady stream of rental income to the group.’

SPH closed two cents up at $3.98 yesterday.

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