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SPH Q1 profit almost doubles to $144.7m (BT)

BackJan 14, 2010

MEDIA group Singapore Press Holdings' net profit for the first quarter to Nov 30, 2009, almost doubled to $144.7 million, from just over $73 million in the same period last year.

That was despite operating revenue for its core newspaper and magazine publishing business falling 2.5 per cent to $243.2 million. The group's total operating revenue rose 4 per cent to about $354 million.

The increase in profitability was helped by a swing in net income from investments - from a net loss of $33.7 million for the previous year's Q1 to a net income of $10.2 million this Q1. Earnings per share for the quarter was nine cents, compared with five cents in the previous Q1.

Recurring profits before tax rose 24.7 per cent to $159.4 million, from $127.8 million the previous year. These profits represent recurring earnings from the media and property businesses, including profits from the group's Sky@eleven development.

SPH's property arm contributed almost $100 million in sales this year, up 22.7 per cent from the previous year.

SPH said advertisement revenue dipped slightly due to fewer classifieds while circulation receipts fell marginally. However, operating revenue 'has shown improvement in recent months', the company said. 'Our advertisement revenue has improved in recent months and is expected to move in tandem with the economy,' said chief executive Alan Chan.

Profits were also boosted by lower costs, primarily due to lower newsprint costs. Staff costs fell 2.2 per cent or $1.7 million due to wage cuts and the government's Jobs Credits grants, while headcount remained flat at 3,945.

SPH announced a partial restoration of pay cuts and Mr Chan said that the company 'will continue to monitor our cost levels closely while at the same time devote resources and explore opportunities to grow beyond print and Singapore'. The directors are pleased with the company's performance in the quarter, he said, and they expect overall performance for FY2010 to be satisfactory.

Profits from the property segment - primarily contributions from the group's Paragon shopping mall and Sky@eleven residential development - are expected to 'contribute significantly to recurring earnings' this financial year, SPH said. Its recent acquisition, a mall in Clementi, is targeted to begin operations in the first half of 2011.

SPH stock closed trading yesterday at $3.66, down 2 cents or half a per cent. SPH owns The Business Times and publishes 16 other newspapers in four languages as well as over 100 magazine titles.