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SPH Q3 net profit falls 44% to S$26.2m

MEDIA and property group Singapore Press Holdings (SPH) on Friday reported a 44 per cent drop in third-quarter net profit to S$26.2 million from S$46.9 million a year ago as the media business stayed challenged amid falling print advertisement and circulation revenue.

The lower earnings were also due to higher operating expenses which rose 5.5 per cent to S$220 million on the back of higher operational costs given the enlarged student accommodation portfolio and SPH Reit as well as higher financing costs and professional fees, said SPH in its results release.

Investment income fell 82 per cent to S$4 million as the treasury and investment portfolio was largely divested by the end of the previous financial year.

Operating revenue for the three months to May came in marginally lower by 1.6 per cent to S$246.1 million from S$250.1 million a year ago on the back of declines in print advertisement and circulation revenue of 16.7 per cent and 7.3 per cent respectively plus the absence of contribution from holdings following its divestment last November.

The decline in operating revenue was cushioned by rental revenue of S$14.3 million from the purpose-built student accommodation portfolio and S$4.2 million from SPH Reit's retail asset, Figtree Grove shopping centre in Australia, said the group.

"The media business continues to be challenged on various fronts including the ongoing trade tensions and the slowing of the Singapore economy, but we remain focused on our digital transformation strategy," said SPH chief executive Ng Yat Chung in the company's results statement.

"We see improved recurring income from the property segment which has expanded its portfolio following recent acquisitions," he added.

Earnings per share for the quarter stood at two Singapore cents versus three Singapore cents a year ago. No dividend was declared for the period.

For the nine-month period, net profit fell 24 per cent to S$111.8 million on the back of a 2.5 per cent fall in operating revenue to S$723.7 million.

While revenue for the media business fell over the nine months by 11.6 per cent to S$439.7 million and profit from this segment declined 32 per cent to S$52 million from a year ago, the digital side of the media business continued to enjoy an upswing. Newspaper digital ad revenue rose 11 per cent while daily average newspaper digital sales improved by nearly 13 per cent.

SPH shares closed unchanged at S$2.49 on Friday before the results release.