SPH – BT

SPH posts FY2011 net profit of $388.6m

THE financial year ended Aug 31 (FY2011) turned out to be a creditable performance for Singapore Press Holdings (SPH), underpinned by higher advertisement revenues, robust growth in rental income, and continued progress in the exhibitions and online businesses.

SPH achieved a net profit of $388.6 million for FY2011. Compared with FY2010’s $497.9 million net profit, the year when the group benefited from profits of $154.2 million from its Sky@eleven condo development, the FY2011 earnings were 22 per cent lower. But excluding the Sky@eleven effect, SPH’s group operating revenue surpassed the previous year’s by $91.5 million (7.9 per cent) and recurring earnings rose $24.1 million (6.3 per cent).

On the street, SPH’s results are in line with consensus as estimates compiled by Bloomberg reflected an expected net income of $380.3 million.

Earnings per share came in at 24 cents, down from FY2010’s 31 cents while group net asset value per share stayed at $1.39.

Group operating revenue, including other operating income, stayed above the billion dollar mark at $1.27 billion, down 9.2 per cent.

Revenue for the newspaper and magazine segment grew year-on-year by $39.2 million (4 per cent) to $1.01 billion. Print advertisement revenue rose by $41.6 million (5.7 per cent), boosted by strong display advertisement sales. Circulation revenue fell slightly by $1.9 million (0.9 per cent).

Rental income for the group continued to register robust growth in FY2011 with an increase of $33.4 million (24.9 per cent). Paragon contributed $15 million (11.4 per cent) to the rise on the back of higher rental rates. Clementi Mall achieved full occupancy, reporting a maiden rental income of $18.4 million.

Operating revenue from the group’s other businesses climbed 37.3 per cent to $69.8 million, driven by income from the exhibitions business for newly acquired and other shows, and higher revenue from online and other media businesses.

Newsprint costs were up $11.8 million (13.1 per cent) due to higher newsprint prices but partially cushioned by a favourable exchange rate. The increase in staff costs of $8 million (2.3 per cent) was attributable to salary increments and increased headcount, partially offset by a reduced variable bonus provision. Staff costs for FY2010 also included government jobs credit.

Other operating expenses rose $30 million (14.9 per cent), with factors including the commencement of Clementi Mall operations and costs incurred for newspaper subscription drives.

Investment income went up $11.1 million (28.3 per cent) to $50.4 million.

On the outlook for FY2012, CEO Alan Chan said: ‘The outlook remains uncertain amidst global economic woes. The group will continue to leverage on its key strengths and synergies to deliver shareholder value. Print advertisement revenue will continue to move in tandem with the performance of the Singapore domestic economy.’

SPH has proposed a final dividend of 17 cents per share, comprising a normal dividend of nine cents and a special dividend of eight cents. Together with the interim dividend paid, total dividend payout for FY2011 will be 24 cents.

SPH shares closed four cents higher at $3.78 yesterday, before its results announcement was made.

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