SPH takes on a more conservative stance on portfolio assets

Chief executive Alan Chan said that the uncertain economic environment forced the firm to lower its risk profile.

“Print advertisement revenue will continue to move in tandem with the performance of the Singapore domestic economy. The Group will strive to sustain its core newspaper business while continuing to actively pursue growth opportunities. In view of the turbulent financial market conditions, the Group has adopted a more conservative portfolio asset allocation and returns are expected to be commensurate with this lower risk profile," said Mr Alan Chan, Chief Executive Officer of Singapore Press Holdings (SPH), in a comment with the new release of its 3QFY12 profit results.

SPH reported group recurring earnings of $112.6 million for the 3QFY12, improving by $2.4 million (2.2%) compared to the corresponding quarter last year (3Q FY11), with a creditable performance from the media and property businesses. Investment income declined year-on-year by $14.2 million (59.9%), impacted by the volatility in the financial markets. Overall, net profit attributable to shareholders of $99.8 million was $15.0 million (13.1%) lower compared to 3Q FY11.

Group operating revenue of $331.8 million for 3Q FY12 was $3.0 million (0.9%) higher compared to 3Q FY11. Revenue for the Newspaper and Magazine business dipped by $1.6 million (0.6%) to $261.4 million. Print advertisement revenue remained stable with a marginal increase of $0.7 million (0.4%) to $201.8 million. Circulation revenue declined by $2.0 million (3.6%) to $51.8 million due to lower copies sold.

Rental income for the Group rose by $5.5 million (12.8%) to $48.7 million. Clementi Mall recorded rental income of $9.5 million, $3.5 million (58.6%) higher compared to 3Q FY11 during which the mall was not fully operational. Revenue from Paragon increased by $1.9 million (5.3%) on the back of higher rental rates.

Operating revenue from the Group’s other businesses decreased by $0.9 million (4.1%) to $21.8 million due to lower income from the exhibitions business.

Newsprint costs fell by $1.4 million (5.1%) as a result of lower print volume. Staff costs rose by $6.0 million (6.8%) due to salary increments, variable bonus provision, and increased headcount from the acquisition of ACP Magazines.

Other operating expenses were up by $4.1 million (7.0%) due to higher distribution, business promotion and premises costs in line with increased business activity.