SPH reports lower Q2 net profit

SINGAPORE Press Holdings (SPH) on Tuesday reported a 25.7 per cent year-on-year decline in net profit to S$29.69 million for the second quarter, in line with lower revenue and a fair-value change on investment properties of S$12.86 million.

Operating revenue for the three months ended Feb 28 was down 4.4 per cent to S$223.33 million. 

For the six-month period ended Feb 28, net profit fell 14.7 per cent year-on-year to S$85.61 million due to the lack of investment gains as the treasury & investment portfolio was largely divested by August 2018. Operating revenue eased 3 per cent to S$477.6 million, while operating expenses fell 5.6 per cent to S$365.28 million mainly due to ongoing cost control and the absence of retrenchment costs seen in the previous period.

For the second quarter, the group - which owns newspapers such as The Business Times and The Straits Times - reported earnings per share of two Singapore cents, on a par with the corresponding period a year ago.

The fair-value change on investment properties of S$12.86 million during the quarter relates mainly to expensing of stamp duty for the recently acquired Figtree Grove Shopping Centre in Australia by SPH Reit. 

For 1HFY19, revenue for the media business fell 10.1 per cent to S$296.2 million partly as a result of the shorter festive advertising window between Christmas and Chinese New Year. Profit was 3.8 per cent lower at S$42.1 million. Meanwhile, total digital revenue - which includes revenue from other digital portals, circulation and online classifieds - grew 13.1 per cent.

Revenue from the property segment in 1HFY19 was 15.3 per cent higher at S$140.3 million on the back of acquisitions by SPH Reit and the UK student accommodation portfolio, while profit was 2.3 per cent higher, boosted by net operating income of S$6.2 million from the UK student accommodation portfolio.

Ng Yat Chung, chief executive officer of SPH, said: "We continue to make progress with our digital transformation strategy. Although the media business continues to experience headwinds, revenue from the digital side of the business is showing growth. We also see improved recurring income from the property segment which has expanded its portfolio following recent acquisitions."

Mr Ng added: "With the completion of the M1 transaction in March 2019, we look forward to the next step of being part of M1's transformational journey. We will be closely collaborating with Keppel Corporation and M1 to leverage on the synergies among us."

The directors have declared an interim dividend of 5.5 Singapore cents per share, which will be paid on May 24.

SPH shares closed unchanged on Tuesday at S$2.53.