SPH reports third quarter net profit of $52.7 million

SPH reports third quarter net profit of $52.7 million

SINGAPORE - Singapore Press Holdings Limited (SPH) today reported its results for the third quarter ended 31 May 2016 (3Q 2016), turning in a net profit attributable to shareholders of $52.7 million. This was $45.6 million or 46.4 per cent lower compared to the same period last year (3Q 2015).

The results for the current quarter were impacted by impairment charges of $28.4 million, which primarily related to the magazine business whose performance was affected by unfavourable market conditions.

At the operating level, group recurring earnings of $60.8 million was $44.4 million or 42.2 per cent lower year-on-year ("yoy"). Excluding the impairment charges, group recurring earnings would have fallen by $17.1 million or 16.1 per cent.

Group operating revenue slid $15.2 million or 5.0 per cent yoy to $291.6 million, as structural challenges confronting the media industry and the sluggish economic environment continued to weigh on the performance of the group's core Media business.

For the quarter, the Media business saw a $15.7 million or 9.2 per cent dip in advertisement revenue. Circulation revenue was maintained yoy, aided by the positive impact of the newspaper cover price increases implemented on 1 March 2016.

The Property segment turned in a resilient performance despite the subdued retail environment, with revenue up $1.0 million or 1.6 per cent against 3Q 2015. This was on the back of higher rental and services revenue from the Group's retail assets.

The Group continued to contain its cost base despite persistent inflationary pressures on business costs. Excluding the impairment charges, operating expenditure was $207.5 million, some $0.7 million or 0.3 per cent lower than the same period last year.

Investment income of $18.7 million fell $5.3 million or 22.2 per cent against 3Q 2015, attributable to lower dividend income and smaller gains from sale of investments.

On a year-to-date basis, for the three quarters ended 31 May 2016, group recurring earnings of $227.9 million was $47.7 million or 17.3 per cent lower than the corresponding period last year. Net profit attributable to shareholders fell $49.1 million or 20.7 per cent yoy to $188.1 million. The third-quarter impairment charges were a major factor in the weaker year-to-date results.

On the business outlook, Mr Alan Chan, Chief Executive Officer of SPH, said: "Given the challenging market conditions, the Group has embarked on a comprehensive review of our core Media business. The aim is to better address the evolving needs of our advertising customers and deliver effective, integrated solutions across our various media platforms. In addition, we will critically examine our product portfolio and also identify areas where we can further enhance our operational efficiency."

Mr Chan added: "We are confident that our continued transformation efforts will position SPH as a forward-looking and efficient organisation, one that is ready to meet the changing demands of a new marketplace."

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