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SPH's Muted Q1 Results Point to Tough Year Ahead (ST)

BackJan 15, 2013

Profit falls 6.6% but property unit and investment income are bright spots

PUBLISHING group Singapore Press Holdings (SPH) warned of a challenging year ahead as it unveiled muted first-quarter results yesterday.

The numbers point to a tougher environment for newspapers, with the group reporting net profit of $91.1 million, down 6.6 per cent when compared with the same period a year earlier.

This was on the back of a 3.1 per cent dip in operating revenue to $322.1 million for the three months to Nov 30.

Contributions from the group's newspaper and magazine business declined, as did those from the exhibitions arm.

Turnover from newspapers and magazines slid 2.3 per cent to $263.5 million when compared with the preceding year due to lower revenue from both circulation and advertising. Circulation revenue fell 2.6 per cent to $49 million. Advertising was affected as well, with revenue down 2 per cent at $204.8 million, primarily due to fewer classified ads.

"The near-term economic outlook for Singapore remains modest," SPH said in a statement yesterday, noting that its print advertisement revenue is expected to move in tandem with the performance of the Singapore economy.

Operating revenue from SPH's other businesses, which include exhibitions, fell a sharper 34.3 per cent to $10.4 million.

The exhibitions unit took a hit in the quarter "due to certain shows being held on different dates in the comparative period", the company said in a statement. It did not specify these shows.

However, those declines were cushioned by operating revenue from SPH's property unit.

Rental income climbed 2.9 per cent year-on-year to $48.2 million due to higher rental rates from Paragon, while income from The Clementi Mall remained stable. The firm said its two retail properties, Paragon and The Clementi Mall, are fully leased and "continue to turn in a steady performance".

The Seletar Mall is expected to be completed at the end of next year, it added.

Another bright spot was investment income, which shot up 420.3 per cent to $3.1 million in the first quarter when compared with the corresponding period a year ago.

Earnings per share stood at six cents for the first quarter, unchanged from the preceding year, while net asset value per share was $1.29 as of Nov 30 last year, down from $1.39 as of Aug 31 last year.

Chief executive Alan Chan said: "The year ahead will be challenging.

"Given the uncertain economic times and the changing media consumption trends, we will monitor our cost structure carefully as we strive for a sustained performance in our core newspaper business."

SPH's share price fell one cent to close at $4.11 yesterday.