SPH – BT

SPH reports Q3 net profit of $114.8m

SINGAPORE Press Holdings’ (SPH) third-quarter net profit and operating revenue fell 30.2 per cent and 20.8 per cent respectively, due mainly to the absence of contributions from the Sky@eleven development which was completed in May 2010.

For the three months ended May 31, net profit attributable to shareholders dropped to $114.8 million from $164.6 million a year earlier while turnover fell to $328.8 million from $414.98 million.

Excluding the previous Q3’s figures from Sky@eleven, net profit rose 17.1 per cent and operating revenue improved 4.4 per cent year-on-year.

SPH said yesterday that ‘improved performance from the Internet and exhibition businesses cushioned a marginal reduction in profits from the newspaper and magazine segment’.

Earnings per share for the quarter were seven cents, down from 10 cents a year ago. Group net asset value per share of $1.33 as at May 31, was also down from $1.39 at the end of the last financial year.

The newspaper and magazine segment posted operating revenue of $263 million, a 1.1 per cent dip from a year ago. Print advertising revenue slipped 1.6 per cent to $201.1 million, ‘mainly due to lower Classifieds advertisements’. Circulation revenue kept stable year on year at $53.8 million, thanks to newspaper subscription drives.

Though the property segment’s revenue dropped 68.1 per cent with the completion of Sky@eleven, property rental income grew 22.8 per cent in the quarter to $43.2 million, thanks to Paragon’s higher rental rates and a $6 million rental income from Clementi Mall for Q3 FY11. The Clementi Mall is fully leased and tenants have progressively started operations since January this year.

The strongest revenue growth of 64.5 per cent came from the group’s ‘other businesses’. Exhibitions held in Q3 – newly acquired IT Show and Food & Beverage Fair and the maiden trade show BuildTechAsia – contributed the most.

Costs associated with this exhibition business, as well as higher newsprint costs, pushed materials, consummables and broadcasting costs up by 14.9 per cent, or $5.8 million. Despite salary increments and a higher headcount, staff costs fell 8.6 per cent, or $8.3 million, due to a lower variable bonus provision.

Higher dividend income and fair value gains on investments led to a doubling of Q3 investment income year on year, to $23.7 million.

For the nine months ended May 31, the group’s recurring earnings of $305.4 million was 34.1 per cent lower than for the same period last year, which included Sky@eleven profits of $159.2 million. Investment income increased by $14.6 million (57.5 per cent). Net profit attributable to shareholders of $292.5 million was 30.8 per cent lower.

Chief executive Alan Chan said: ‘In the near term, prospects remain positive and the group’s print advertisement revenue is expected to move in tandem with the Singapore domestic economy. The Clementi Mall, which was officially opened in May, is poised to enjoy good catchment from the surrounding residential areas and tertiary institutions. We will continue to invest in new media and explore business adjacencies for growth.’

SPH closed four cents lower at $3.91 yesterday, on a day when Asian markets were hit by fears over European debt woes.

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