SPH's Q1 profit up 17.3% at S$81.3m

Singapore

SINGAPORE Press Holdings (SPH) reported a 17.3 per cent rise to S$81.3 million in first-quarter net profit attributable to shareholders .

Operating profit - representing the recurring earnings of the group's media, property and other businesses for the three months ended Nov 30, 2015 - fell 3.3 per cent to S$99 million.

Group operating revenue slipped 3.5 per cent to $296.2 million led by an 8.7 per cent dip in revenue from the media business but this was cushioned by a better showing from its property and other businesses.

Advertisement and circulation revenues, which fell 10.6 per cent and 5 per cent respectively, led the media business to post a lower revenue of S$223 million in the quarter.

A cautious advertising market drove newspaper ad revenue down 11.9 per cent during the quarter from a year ago.

In a statement, SPH attributed the decline to "anaemic economic growth and a continuously evolving competitive landscape" with the operating environment expected to remain difficult over the current financial year.

There was steady growth elsewhere, chiefly from the property segment with a 16 per cent jump in revenue to S$59.7 million, helped by contribution from The Seletar Mall which opened its doors in November 2014.

SPH said it expects The Seletar Mall and its other retail assets - Paragon and The Clementi Mall - to continue to turn in a "steady and resilient" performance. Other businesses, driven by higher income from exhibitions and online classifieds, posted a 20 per cent jump in revenue to S$13.5 million.

Investment income for Q1 was $10.3 million. "The improvement of $8.7 million against the corresponding period last year was mainly due to a fair value loss that was included in Q1 2015 on forward hedges for portfolio investments," said SPH.

The share of losses of associates and joint ventures declined by $6.2 million or 77.5 per cent due to reduced losses from the regional online classifieds business. The S$5 million rise in other operating income included a write-back of contingent consideration for an acquired business.

Total operating expenditure fell 1.2 per cent to $205.7 million owing to lower newsprint, staff and other materials, production and distribution costs, thanks to the group's emphasis on cost discipline and operating efficiency.

"Despite the sluggish macroeconomic environment and structural challenges confronting the media industry, the group managed to deliver another set of satisfactory results," said SPH chief executive Alan Chan.

"The operating environment for FY2016 is expected to remain difficult. To address the challenges ahead, the group will redouble its efforts to sustain the media business, including adjacent businesses, and continue to evaluate and pursue growth opportunities," he added.

Earnings per share for Q1 were five Singapore cents, up from four cents a year ago.

SPH shares ended trading on Tuesday down four cents at S$3.67 amid weak market sentiment.