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Property boost helps SPH weather tough year (BT)

BackOct 13, 2009

Profit slips just 3.6% to $422m; recurring earnings also sturdy at $497m



[SINGAPORE] In spite of challenging conditions, media group Singapore Press Holdings yesterday reported a net profit of $421.9 million for the year ended Aug 31, 2009, 3.6 per cent lower than the preceding year's $437.4 million.

Revenue held steady at $1.3 billion as a surge in property revenue compensated for a 12 per cent fall in the core newspaper and magazine segment.

SPH publishes 17 newspapers, including The Business Times, and more than 100 magazine titles.

The company announced a final dividend of 18 cents a share, comprising a normal dividend of 9 cents and a special dividend of 9 cents, to be paid on Dec 23.

Total payout for FY2009 is 25 cents, or 6.4 per cent based on yesterday's closing price of $3.88 a share. Earnings per share was 26 cents, compared with 27 cents for the preceding year.

SPH chairman Tony Tan said it had been a difficult year with many companies suffering large losses. "Given the circumstances, SPH

Operating profit or recurring earnings fell slightly to $497 million, from FY2008's $501.7 million. Net income from investments fell from a gain of $47.7 million the year before to a loss of $6.2 million for FY2009.

The core newspaper and magazine division had sales of $892.4 million, down 12 per cent from just over $1 billion the year before, and before-tax profits of $286 million, down from $370.6 million the year before.

However, the property segment turned in a robust performance with revenue up 43.2 per cent at $365.6 million. Revenue from its condominium development Sky@eleven and the Paragon shopping mall rose $104.3 million and $5.3 million respectively. The property segment's before-tax profits jumped to $242 million, from the preceding year's $162.8 million.

While higher property expenses contributed to slightly raised total operating expenses, the rise was offset by a $46.2 million or 14 per cent drop in staff costs resulting from lower bonus provision, the Jobs Credit grant and wage cuts implemented in April this year.

Dr Tan said the company will continue to explore opportunities to expand its property arm.

" did well with FY2009 profits just a shade below that of FY2008," Dr Tan said.SPH has been very encouraged by the success of our present interest in property," said Dr Tan. "We've derived considerable experience in the property field now and we're always looking for new avenues to augment our profits. We will look at opportunities again as they arise."

On the outlook for FY2010, SPH CEO Alan Chan said: "Business outlook remains uncertain although there are signs of a gradual recovery. Our advertisement revenue, which saw some improvements in recent months, is expected to move in tandem with the economy."

SPH will continue to monitor costs.

"Barring unforeseen circumstances, the directors expect performance for the current financial year to be satisfactory," said Mr Chan.

SPH shares closed up six cents at $3.88 yesterday, its highest in 12 months. It is almost 70 per cent up from its March low of $2.32.