Singapore, 11 July 2008 - Singapore Press Holdings Limited (SPH) today reported its results for the third quarter ended 31 May 2008. Profit before investment income was up 26.2% to $135.1 million against $107.1 million last year on the back of higher revenue contribution from Newspaper and Magazine segment and Sky@eleven. Investment income of $25.7 million for the quarter was lower than last year´s $75.3 million, amidst much turbulence in the global financial markets. Net profit declined 15.6% to $133.4 million from $158.0 million in the corresponding quarter last year.
Group operating revenue rose 19.5% to $344.4 million against the corresponding quarter last year. Despite an increasingly uncertain global economic outlook weighed by lingering concerns over the US economy and high oil prices, the Group continued to gain traction in the traditional print media, with the Newspaper and Magazine segment registering revenue growth of above 5%. Print advertisement revenue remained the growth driver with an increase of 6.3% to $207.9 million. Revenue from Sky@eleven of $38.1 million contributed substantially to the improved performance in Property segment, while Paragon posted an increase of $3.1 million in income from rental and related services.
Total operating expenses of $212.7 million rose by $28.7 million or 15.6%. Property development costs for Sky@eleven accounted for $10.8 million while staff costs increased by $10.6 million or 13.8% mainly attributable to increased headcount, annual salary increment and higher variable bonus provision. Total headcount grew to 3,874 as at end May 08 from 3,684 a year ago, as the Group intensified its efforts to expand into the new media and magazine businesses. Other operating expenses were up by $6.4 million or 15.0% in line with increase in business activity and inflationary pressures.
Group investment income at $25.7 million was $49.6 million or 65.9% lower than last year. The decline was mainly due to higher profit on sale of investments last year. In addition, last year included income from capital reduction exercise undertaken by an investee company, MobileOne Limited.
For the 9 months ended 31 May 2008, the Group posted 26.6% increase in profit before investment income to $373.4 million from $294.8 million a year ago, contributed mainly by Sky@eleven and stronger performance from the Newspaper and Magazine segment. Investment income was $40.7 million compared to last year´s $136.6 million, mainly due to higher profit on sale of investments last year and downward fair valuation of investments this year. In addition, last year´s income included profit from capital reduction exercises by MobileOne Limited and Starhub Limited. After accounting for taxation, net profit was down 8.0% to $344.9 million from $374.8 million in the corresponding period last year.
Commenting on the outlook for the next 12 months, Mr Alan Chan, Chief Executive Officer of SPH said: “The Singapore economy is forecasted to grow at a more moderate pace in 2008. Advertising revenue, which has registered commendable growth and remained resilient so far, is expected to perform in tandem with the economy. Newsprint prices, which have seen sharp increases, are poised to rise further due to escalating production costs as well as supply and demand imbalances. Performance of the property segment continues to be underpinned by profit contribution from Sky@eleven and strong rental income growth from Paragon. Barring unforeseen circumstances, the Directors expect the recurring earnings for the current financial year to be better than the previous financial year”.
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About Singapore Press Holdings Ltd
Newspapers and Magazines
Main board-listed Singapore Press Holdings Ltd (SPH) is the leading media company in Singapore, delivering news and information through print, Internet and broadcasting platforms. In Singapore, it publishes 14 newspapers in four languages. Every day, 2.9 million individuals or 81 percent of people above 15 years old, read one of SPH’s news publications. SPH also publishes over 90 magazine titles in Singapore and the region, covering a broad range of interests from lifestyle to information technology.
Internet and Mobile
Beyond print, the Internet editions of SPH newspapers enjoy over 110 million pageviews with 7 million unique visitors every month. Apart from SPH AsiaOne portal, SPH’s online and new media initiatives include a revolutionary mobile advertising and information service, ZapCode; online marketplace for products, services and employment, ST701; and STOMP (Straits Times Online Mobile Print), a portal that connects, engages and interacts with readers on the Web and via mobile phone messaging.
SPH has a 20 percent stake in MediaCorp TV Holdings Pte Ltd, which operates free-to-air channels 5, 8, U and TV Mobile, and a 40 percent stake in MediaCorp Press Pte Ltd, which publishes the free newspaper, Today. In the radio business, SPH has a 80 percent stake in SPH UnionWorks Pte Ltd, which operates entertainment stations Radio 100.3 FM in Mandarin and Radio 91.3 FM in English.
In addition, SPH has ventured into outdoor advertising through its wholly-owned subsidiary, SPH MediaBoxOffice Pte Ltd, Singapore´s largest outdoor motion display advertising network media company, and a 35 percent stake in TOM Outdoor Media Group, a leading outdoor advertising company in China.
SPH owns and manages Paragon, the prime retail and office complex in the heart of Orchard Road, Singapore’s main shopping belt. SPH’s wholly-owned subsidiary, Times Development Pte Ltd, is also developing a 43-storey upmarket residential condominium, Sky@eleven, at Thomson Road.