SPH FY2011 profit down 22% to $389mn

The group to continue to leverage on its key strengths amidst global economic woes.

Singapore Press Holdings Limited (SPH) on Wednesday reported its results for the year ended 31 August 2011 (FY2011). Compared to the previous financial year (FY2010), Group net profit of $388.6 million was $109.3 million (22.0%) lower as FY2010 had benefitted from Sky@eleven profits of $154.2 million. Excluding the effect of Sky@eleven, Group operating revenue surpassed the previous year’s by $91.5 million (7.9%) and recurring earnings rose by $24.1 million (6.3%). The creditable performance was underpinned by higher advertisement revenues, robust growth in rental income, and continued progress in the exhibitions and online businesses.

Revenue for the Newspaper and Magazine segment grew year-on-year by $39.2 million (4.0%) to $1,013.3 million. Print advertisement revenue rose by $41.6 million (5.7%), boosted by strong Display advertisement sales. Circulation revenue fell slightly by $1.9 million (0.9%).

Rental income for the Group continued to register robust growth in FY2011 with an increase of $33.4 million (24.9%) compared to FY2010. Paragon contributed $15.0 million (11.4%) to the increase on the back of higher rental rates. Clementi Mall achieved full occupancy and reported its maiden rental income of $18.4 million this financial year.

Operating revenue from the Group’s other businesses improved by 37.3% to $69.8 million. The increase was driven by income from the exhibitions business for newly acquired and other shows, and higher revenue from online and other media businesses.

Newsprint costs increased by $11.8 million (13.1%) fuelled by higher newsprint prices but partially cushioned by a favourable exchange rate. The increase in staff costs of $8.0 million (2.3%) 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 by $30.0 million (14.9%) with the commencement of Clementi Mall operations, costs incurred for newspaper subscription drives and step-up in overheads in tandem with increased business activities and inflationary pressures.

Investment income rose by $11.1 million (28.3%) to $50.4 million in FY2011. The increase was attributable to higher dividend and interest income and gains on derivative financial instruments, according to an SPH report.

On the outlook for FY2012, Mr Alan Chan, Chief Executive Officer of SPH commented: “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.” 

The Directors of SPH have proposed a Final Dividend of 17 cents per share, comprising a Normal Dividend of 9 cents per share and a Special Dividend of 8 cents per share in respect of the financial year ended 31 August 2011. These dividends are on tax-exempt (one-tier) basis and will be paid on 23 December 2011. Together with the Interim Dividend paid during the year, total Dividend payout for FY2011 will be 24 cents.