Singapore, 11 July 2006 - Mainboard-listed Singapore Press Holdings Limited (SPH) today reported results for its third quarter ended 31 May 2006. Net profit improved 80.7% to $174.6 million from $96.7 million a year ago, as a result of exceptional gain of $69.1 million compared to previous year´s exceptional loss of $11.6 million.
The Group´s operating revenue registered an increase of 2.2% over the same quarter last year. Revenue for the Newspaper and Magazine operations increased 0.6% to $237.2 million, and Property segment rose 8.3% to $24.3 million. Despite higher operating revenue, profit before investment income of $94.5 million was 8.8% lower than last year due to higher newsprint and other operating costs this year.
Total operating expenses at $173.5 million was 9.6% higher. Newsprint cost rose 12.2% as a result of higher consumption and price increase. Staff cost was marginally down 0.2% due to timing difference in provision for staff variable bonus partially offset by increase due to annual salary increment and higher headcount. Total headcount as at end May 2006 was 3,583, compared to 3,448 a year ago mainly due to the launch of new editorial products and ventures into outdoor and other media businesses. Similarly, other expenses were higher as a result of costs associated with activities in outdoor and other media businesses. In addition, there was no write-back of allowance for doubtful debts as in the previous year.
Group investment income for the quarter was $31.5 million, down from $38.0 million last year. The decreases in contribution from externally-managed investments and profit on sale of internally-managed investments due to poorer market conditions and lower trading volume this year were partially offset by increase in dividend income received.
The fair value of The Paragon, determined based on a recent independent professional valuation, is $1.52 billion. This valuation, which is done on an annual basis, is required under the terms of the bank loan for The Paragon.
The exceptional gain of $69.1 million this year was mainly in relation to the write-back of impairment losses of $70.5 million for The Paragon in view of its strong sustained valuation. The gain was offset by impairment provision of $1.4 million arising from the acquisition of SPHMBO. The exceptional loss last year pertained to charges associated with the media merger.
Mr Alan Chan, Chief Executive Officer of SPH said: “The valuation of The Paragon is expected to stay healthy on the back of a sustained recovery in the property market. Together with on-going efforts to enhance rental yields, the fundamentals of The Paragon remain strong. In view of this, the Directors are committed to holding on to The Paragon for the foreseeable future.”
For the nine months ended 31 May 2006, the Group registered a net profit of $357.6 million against previous year´s $413.3 million. This year included $70.5 million of write-back of impairment losses for The Paragon while previous year included $128.5 million gain on sale of a substantial portion of the Group´s stake in Starhub Ltd.
Commenting on the outlook for the rest of the financial year, Mr Alan Chan said: “Barring unforeseen circumstances, Singapore´s economic outlook for 2006 remains healthy. Nonetheless, business and consumer sentiments remain shaped by concerns over the geopolitical and global economic environment in areas such as pressure on oil prices, rising interest rates, threats of terrorism and an avian flu pandemic. Overall, the Directors expect the recurring earnings for the current financial year to be satisfactory.”
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Mr Arnold Gay
Singapore Press Holdings
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About Singapore Press Holdings Limited
Main board listed Singapore Press Holdings Limited is the leading media company in Singapore, in the print, Internet and broadcasting platforms. It publishes 14 newspapers in the four official languages, including Singapore’s first free Chinese newspaper, My Paper, and over 80 magazine titles. Everyday, 2.8 million individuals, or 88 per cent of the people above 15 years old, read one of the SPH publications. Its Internet Business Unit manages the online editions of SPH’s major newspapers, which enjoy over 100 million pageviews from 6 million unique visitors every month. More recent online additions are the classified website, ST701, and STOMP (Straits Times Online Mobile Print), a portal that connects, engages and interacts with readers on the Internet and via mobile messaging.
SPH also owns a 20% stake in MediaCorp TV Holdings Pte Ltd, which operates free-to-air channels 5, 8, U and TV Mobile, and a 40% stake in MediaCorp Press Pte Ltd, which publishes free sheet Today. SPH has a 70% stake in UnionWorks, which operates two entertainment radio channels, UFM 100.3 FM in Chinese and WKRZ 91.3 FM in English. In addition, SPH holds an 80% stake in SPH MediaBoxOffice Pte Ltd, Singapore´s largest LED network media company, and a 35% stake in TOM Outdoor Media Group, a leading outdoor advertising company in China.