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SPH's Q1 Net Profit Dips On Reit Payout (ST)

BackJan 15, 2014

Part of profits from SPH Reit goes to minority unitholders

MEDIA and property company Singapore Press Holdings (SPH) yesterday reported that first quarter net profit dipped 6.6 per cent as part of the profits from the recently listed SPH Reit had to be paid out to minority unitholders. 

Net profit for the three months to Nov 30 was $88.8 million, compared with $95.1 million a year earlier.

SPH Reit had listed in July last year, with The Clementi Mall and Paragon in its portfolio. 

SPH maintains a 70 per cent stake in the Reit while 30 per cent is held by minority unitholders.

Recurring earnings at SPH for the quarter were $116.9 million, 2.2 per cent higher than a year earlier.

This was due to higher contributions from the exhibitions, radio and online classifieds businesses, though this was partially offset by reduced earnings from the newspaper and magazine business. There were also higher finance costs due to additional borrowings undertaken on the establishment of SPH Reit.

Group operating revenue rose 2 per cent to $328.5 million.

Revenue for the newspaper and magazine business was 2.9 per cent lower at $255.9 million due to lower advertisement and circulation revenue. 

But revenue for the property segment rose 5.4 per cent to $50.8 million on the back of higher rental income from Paragon and The Clementi Mall. Operating revenue from the group's other businesses including exhibitions also rose.

Total operating costs rose 1.4 per cent to $215.1 million. Materials, production and distribution expenses were lower, as were business promotion costs. But staff costs and finance costs rose. 

Earnings per share was six cents for the quarter, unchanged from a year earlier.

Net asset value per share was $2.10 at Nov 30 last year, down from $2.19 at Aug 31.

"The near-term global and domestic economic outlook remains modest with persisting uncertainties," said SPH chief executive Alan Chan in a statement.

"Against the backdrop of an evolving media landscape and changing consumer behaviour, the group continues to evaluate and pursue new growth opportunities whilst striving to revitalise its core media business." 

SPH said in its results announcement that its print advertising revenue is "expected to perform in tandem with the underlying economic and market trends". 

"Newsprint prices are expected to remain stable taking into account near-term market demand and supply conditions," said the company.

It added that the retail malls in SPH Reit - Paragon and The Clementi Mall - are fully leased and "will continue to turn in a steady performance". 

The development of The Seletar Mall is expected to be completed on schedule at the end of this year, said SPH.

The results were announced after markets closed. SPH shares fell three cents or 0.7 per cent to $4 yesterday