SPH Q3 profit up 30% to $165mln but circulation revenue down

Revenue from the Property segment rose by 43.4% but circulation revenue decreased by $1.7 million.

Singapore Press Holdings Limited (SPH) reported its results for the third quarter ended 31 May 2010. The Group delivered a strong performance in the third quarter with recurring earnings of $176.8 million, $45.5 million (34.7%) higher than the corresponding quarter of the previous financial year. This was attributable to the rebound in performance from the Group’s Newspaper and Magazine segment as well as higher contribution from Sky@eleven. Net profit rose by 29.9% to $164.6 million, according to an SPH announcement.

Group operating revenue at $415.0 million was $87.9 million (26.9%) higher compared to the same period of the previous financial year. Boosted by the strong rebound in advertisement sales, the Group’s Newspaper and Magazine segment achieved revenue of $265.9 million, a $43.9 million (19.8%) increase. Print advertisement revenue jumped 28.1% to $204.3 million with improvements seen in Display, Recruitment and other advertisement categories. Circulation revenue decreased by $1.7 million (3.1%). Revenue from the Property segment rose by $40.9 million (43.4%) to $135.3 million, on the back of higher revenue from Sky@eleven and increase in rental income from Paragon. Sky@eleven obtained its Temporary Occupation Permit (TOP) in May 2010.

Total operating expenses for the quarter increased by $41.7 million (20.8%) to $241.6 million. Newsprint costs were lower by $8.8 million (27.3%). Property development costs of $28.1 million were recognised for Sky@eleven, up $9.9 million (54.3%). Staff costs increased by $25.5 million (36.1%) to $96.4 million as a result of higher variable bonus provision in line with the improved profits from the newspaper business and lower government jobs credit grant received this year. Other operating expenses also increased by $8.2 million (19.1%) mainly due to higher production and premises costs and other overheads.

Investment income of $11.7 million in the third quarter of this financial year mainly comprised dividend and interest income.

For the nine months ended 31 May 2010, recurring earnings of the Group leapt 31.4% to $463.7 million from $353.0 million a year ago. Group operating revenue crossed the $1 billion mark and, at $1,087.6 million, was $133.2 million (14.0%) higher year-on-year. Total operating costs increased by $21.8 million (3.6%). Against the same period last year, profit before tax for the Newspaper and Magazine segment rebounded strongly by $68.1 million (31.6%) to $283.7 million while profit before tax for the Property segment rose $50.2 million (31.0%) to $212.3 million. The Group recorded a net investment income of $25.4 million, a turnaround of $41.6 million. Net profit attributable to shareholders surged 47.4% to $422.6 million.

On the outlook for FY 2010, Mr Alan Chan, Chief Executive Officer of SPH, commented: “Our print advertisement revenue and profit from our core newspaper business have rebounded strongly, in tandem with the economic recovery. We will continue to closely monitor and manage our operating efficiencies for a sustained performance in our core newspaper business. The Group remains committed to devote resources to develop our digital and interactive media businesses.”

Barring unforeseen circumstances, the Directors expect overall performance of the Group for FY2010 to be better than that of the previous financial year.