13 April 2009
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SPH Q2 net profit down 12.6% to $87 mln

Singapore Press Holdings’s second-quarter net profit fell 12.6 per cent to $87 million from a year back, as the economic downturn led to shrinking profits for its print media business.

Recurring profit for the three months ended Feb 28, 2009 fell 16 per cent to $93.8 million, the group said today.

Revenue for its core newspaper and magazine segment fell 13.5 per cent to $204.6 million, while overall group revenue fell a narrower 3.7 per cent to $287.2 million.

SPH saw a 32.9 per cent rise in revenue from the property segment to $72.2 million, with Sky@eleven and Paragon contributing $16.3 million and $1.3 million respectively to the increase.

SPH has announced an interim dividend of 7 cents per share, payable on May 20.

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8 April 2009
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What’s news on 13 Apr

A peek into 2Q09 results. We expect SPH’s 2Q09 operating profits on 13 Apr to fall c.12% y-o-y to just about S$103m. This is based on a 17% drop in advertising revenue and high newsprint charge out rate, offset by higher property contributions. We reiterate our belief that the share price has factored this in. Despite rebounding by 13% since our upgrade on 13 Mar, share price is still down by 20% YTD. We think an 8 cents interim dividend, similar to 1H08, can be expected. Maintain Buy, TP remains at S$2.93.

Fall in ad revenues but priced in. We expect 2Q’s operating profits to dip by about 12% y-o-y, and 23% q-oq, to about S$103m. We should see ad revenues fall by about 17% y-o-y, worsening from 1Q’s 7% drop. Higher newsprint charge-out rates will also put pressure on newspaper operations. But, we reiterate our belief that these have been priced in.

Property division provide buffer. This is largely on our expectations of an increased revenue contribution from its property development (Sky@Eleven). We expect about $60 – 65m revenue contribution in 2Q. This coupled with recurring rental income (S$30m) should contribute c. S$95m.

Expect 8 cents interim DPS. An 8 cents interim dividend, similar to 1H08, can be expected. This equates to about 55% of operating profits, in line with preceding years. Our 20cents DPS for FY09 is lowest among consensus. Even so, this equates to a yield of c. 7.6%.

Taken in conservative assumptions. We have already assumed a 20% drop in ad revenues, a high newsprint charge-out rate (US$800/mt vs spot rate of US$660/mt) and a 20% drop in asking rents (for Paragon) for FY09F. We have also introduced FY11F forecasts.

Valuations still undemanding, Buy. Despite having appreciated by 13% since our upgrade on 13 Mar, share price is still 20% down YTD. Valuations are still undemanding at 9.4x implied newspaper earnings, 2x P/B and 7.6% yield. Maintain Buy, TP unchanged at $2.93.

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31 March 2009
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SPH launches new logo to signal future direction

Rebranding portrays group’s stature as top media outfit that is moving beyond just print

Singapore Press Holdings (SPH) yesterday launched a new corporate logo to mark the start of its 25th anniversary celebrations.

‘With SPH moving beyond print, it is time to rebrand ourselves to better represent our current portfolio and future direction,’ said SPH chairman Tony Tan.

Together with guest-of- honour President SR Nathan, Dr Tan unveiled the new logo at SPH’s News Centre headquarters yesterday, to fanfare and confetti.

The event, which kicked off to local street percussion band Strikeforce’s beats, was witnessed by the outgoing Minister for Information, Communication and the Arts Lee Boon Yang and Rear Admiral (NS) Lui Tuck Yew who is taking over Dr Lee’s position.

Also present were SPH directors including deputy chairman Cham Tao Soon, former minister for communications and information Yeo Ning Hong, former chief justice Yong Pung How, and former ministry of finance permanent secretary Ngiam Tong Dow, as well as business associates such as UOB’s chairman Wee Cho Yaw and some 300 employees and guests.

In his speech, Dr Tan said: ‘The media industry has changed dramatically over the past decade. I’m pleased that SPH has been quick to respond to these changes in the industry and has invested in new ventures that give us potential for growth.’

He explained that while print remains SPH’s core business, the company now owns online, mobile, outdoor and broadcast media, as well as non-media businesses like properties, directory searches, and events management.

Hence the need for a new logo to replace the old stylised graphic of the web and rollers of a newspaper printing press.

The new design, for which plans began in 2007, ‘portrays SPH’s initiative in engaging and connecting with all our stakeholders’, and ‘reinforces SPH’s stature as a leading media organisation – confident, authoritative yet approachable’, Dr Tan said.

In his speech, Dr Tan credited President Nathan with being key to the formation of SPH in 1984, through a merger of Singapore News and Publications Limited, Times Publishing Berhad, and the Straits Times Press group of which Mr Nathan was executive chairman.

Mr Nathan himself described his six years at Straits Times Press and in SPH as ‘a unique experience’, prior to which he had been in the civil service with no experience in the newspaper business.

He recounted: ‘The day before I started work, the then prime minister Mr Lee Kuan Yew told me: ‘Nathan, I’m giving you The Straits Times. It has something like 150 years of history. It is like a bowl of china. You break it, I can piece it together again, but it will never be the same. Try not to.’

‘I am proud to say that the bowl that was handed to me and passed on to successor leaders of SPH remains unbroken – in fact it has achieved a better glow with successive years.’

SPH now faces a new media climate, Mr Nathan said, with competition from electronic media and a wider base of more critical readers.

But, he added: ‘I am confident SPH with its 25 years of track record is well equipped to succeed in this new climate.’

In line with its 25th anniversary celebrations, SPH has also revamped its corporate website and SPH- owned shopping mall, Paragon, will be staging free weekend concerts in the next two months and giving out $25,000 in shopping vouchers.

SPH’s CEO Alan Chan said: ‘On this silver anniversary, I wish to assure all our stakeholders that as we celebrate our past 25 years of achievements, we are committed to achieving another 25 years of excellence, even in these challenging times.’

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