Singapore Press Holdings posts 29% fall in 1Q net profit to $102.3m
Singapore Press Holdings today reported net profit attributable to shareholders for the first quarter ended 30 November 2010 (1Q 2011) fell 29.3% y-o-y to $102.3 million.
Profit from the Newspaper and Magazine segment improved by 10.0%, driven by the increase in print advertisement revenue.
Group recurring earnings of $116.3 million fell by $43.0 million (27.0%) compared to the corresponding quarter last year which included $50.3 million profit from the Group’s completed property development project, Sky@eleven.
Group operating revenue at $318.7 million was 12.3% higher than that of 1Q 2010, excluding Sky@eleven revenue of $70.1 million in the comparative period last year.
The Newspaper and Magazine segment turned in a creditable performance with revenue for 1Q 2011 at $265.5 million, an increase of $9.2% against 1Q 2010. Print advertisement revenue grew 13.1% to $206.3 million driven by Display and Recruitment advertisements. Circulation revenue decreased 2.1% due to lower copies sold.
Rental income from Paragon increased 26.1% partly from rental revisions and increased floor area as a result of the façade enhancement Materials, consumables and broadcasting costs increased by 15.1%, as a result of higher newsprint and other production costs. Staff costs increased by $11.7 million 15.6% largely attributable to higher variable bonus provision and partial wage restorations.
Investment income of $6.1 million for 1Q 2011 comprised dividend and interest income and profit on sale of investments. The decrease of $4.1 million as compared to 1Q 2010 was mainly due to lower fair value gains.
On the outlook for FY 2011, Alan Chan, Chief Executive Officer of SPH, says: “The Singapore economy is expected to grow at a modest pace supported by sturdy regional demand and domestic activities. The Group’s advertisement revenue will continue to track the Singapore domestic economy. The opening of Clementi Mall marks a new milestone for the Group. Stores in the lower levels have commenced trading and full tenancy commitment is expected when the mall officially opens in April 2011.”
Barring unforeseen circumstances, the directors expect the recurring earnings of the media and property businesses for the current financial year to be satisfactory.
Source : The Edge
My Comments: I think I would hold SPH for the time being as the decline in profits is due to the fact that SPH received lower property revenue compared to last year. The drop in profits is not due poor fundamentals or any other compelling (fundamental and technical) reasons.