SPH FY15 profit down 20.4% on smaller property valuation gains

SINGAPORE Press Holdings' (SPH) net profit fell 20.4 per cent in the year ended Aug 31 as smaller fair-value gains on investment properties offset a slight increase in recurring operating profit.

The media company, which owns The Business Times, declared a final dividend of 13 Singapore cents per share, comprising a normal dividend of eight Singapore cents per share and a five Singapore cents per share special dividend. The total dividend payout for fiscal 2015 will be 20 Singapore cents, slightly below the 21-cent-per-share payout in fiscal 2014. SPH shares closed at S$4 on Tuesday, up by 0.3 per cent or a penny, before the results were announced.

Net profit for the year decreased to S$321.7 million, or about 20 Singapore cents per share, as fair value change on investment properties fell 66.8 per cent to S$36.3 million from S$109.1 million a year earlier.

The drop in investment properties' fair value gains was mostly due to changes in the valuation of the malls held in SPH Reit, SPH's listed retail mall investment trust.

Valuations aside, SPH's property business was the company's key growth driver. The segment, which comprises SPH's stake in SPH Reit and The Seletar Mall, saw operating revenue increase by 12.6 per cent to S$230.8 million during the year, leading to a pre-tax operating profit increase of 14.9 per cent to S$149.7 million.

Media operating revenue slipped 6.3 per cent to S$902.5 million, although margins improved slightly and pre-tax profit for the segment decreased by a more modest 5.5 per cent to S$241.5 million.

Operating revenue from other businesses, which included exhibitions and online classifieds, slowed by 6.4 per cent to S$43.8 million, but pre-tax loss shrank to S$38.6 million in fiscal 2015 from a year-ago S$50.0 million.

At a press conference, SPH chief executive Alan Chan said that the company has been facing challenges from the consumption switch towards digital content and a slower Singapore economy.

He said in a statement: "Despite the tough market conditions, the group has delivered a creditable performance with recurring earnings maintained year on year. That said, the operating environment will likely remain challenging for the year ahead. Amid the difficult times, the group is seeing growth in its digital media revenues and will continue to evaluate and pursue growth opportunities."