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SPH Q1 net profit falls 6% on lower investment income

MEDIA and property group Singapore Press Holdings’ net profit for the first quarter ended November fell 6.3 per cent to S$57.9 million from S$61.8 million a year ago owing to the decline in investment income following the partial divestment last August of the treasury & investment portfolio.

“The divestment was timely as SPH locked in gains and avoided losses on the portfolio during the recent financial market turbulence,” said SPH in its results announcement on Friday. The group has said that it will allocate proceeds from the divestment into more yield-generating assets.

Operating revenue came in marginally lower by 1.7 per cent at S$254.3 million from S$258.8 million in the previous year’s corresponding quarter.

The absence of retrenchment costs over the period under review versus a year ago saw operating expenses dip 7 per cent to S$184 million. Accordingly, the group’s operating profit rose 7.6 per cent to S$75 million.

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Earnings per share stood at four Singapore cents, unchanged from a year ago. No dividend was recommended for the period, the same as a year ago.

SPH’s media business saw revenue slip 6.8 per cent to S$162 million while operating profit improved nearly 15 per cent mainly due to the absence of retrenchment costs recognised over the same quarter last year. Print ad revenue fell 7.2 per cent - the slowest rate of decline in four quarters while digital ad revenue enjoyed double-digit growth of 12.9 per cent.

Revenue from the property segment - SPH’s largest profit segment and a steady one at that - rose 11.1 per cent to S$68 million while the segment chalked up a 5.2 per cent jump in operating profit, thanks to the initial contribution of S$3.2 million in net operating income from the UK student dormitory assets which SPH acquired in September 2018.

Revenue from the Others segment including the aged care business improved 2.6 per cent to S$24.2 million.

“The print side of the media business continues to experience headwinds, even as we grew revenue from the digital side of the business,” said SPH chief executive Ng Yat Chung, while pointing out that the group has made progress in growing recurring income in the property segment with the contribution the UK student housing assets. Plans to grow the assets to a “sizeable platform” are on track, said the company.

SPH said that the media business continues to pursue various digital initiatives and new partnerships as it seeks to enhance the products and improve audience engagement with better use of data analytics.

The counter closed unchanged at S$2.49 on Friday.