SINGAPORE - Singapore Press Holdings Limited (SPH) today reported its results for the year ended 31 August 2013 (FY 2013).
Net profit attributable to shareholders of $431 million was $143.8 million (25.0 per cent) lower compared to FY 2012. The current year's results included a fair value gain of $111.4 million arising from the change in recognition of investment properties from cost to fair value basis in view of the establishment of SPH REIT. This was $87.3 million (43.9 per cent) lower than the fair value gain recognised in the previous year based on restated financial statements.
Group recurring earnings of $369.3 million fell by $59.5 million (13.9 per cent), mainly attributable to lower contribution from the Newspaper and Magazine business including an impairment charge for an overseas subsidiary. In addition, there was a step-up in business activities for the Online segment.
Group operating revenue of $1,239.5 million for FY 2013 was $33.5 million (2.6 per cent) lower against FY 2012. Revenue for the Newspaper and Magazine business fell $40.0 million (3.9 per cent) to $991.2 million. This was attributable to declines in advertisement revenue ($31.7 million or 4.0 per cent) and circulation revenue ($7.2 million or 3.6 per cent).
Rental income for the Group edged up by $6.7 million (3.5 per cent) to $198.1 million on the back of higher rental rates achieved by Paragon, while income from The Clementi Mall remained stable. During the year, SPH REIT was established via the injection of Paragon and The Clementi Mall, with the Group retaining a 70 per cent stake.
Materials, production and distribution costs saw a reduction of $12.9 million (5.8 per cent), with newsprint costs being lower by $12.2 million (12.2 per cent). Staff costs decrease of $10.5 million (2.9 per cent) was attributable to a lower variable bonus provision partially offset by salary increments.
Other operating expenses rose $40.4 million (29.6 per cent). The increase arose mainly from certain non-recurring charges totalling $26.0 million which included impairment of an overseas magazine subsidiary due to unfavourable market outlook ($15.6 million). In addition, there was an increase in cost of $8.0 million in tandem with a step-up in business promotion activities particularly for the online businesses.
Investment income fell $18.6 million (57.1 per cent) to $14.0 million. This was due to impairment charges of $17.6 million on portfolio investments arising from prolonged decline in value.
On the outlook for the business, Mr Alan Chan, Chief Executive Officer of SPH commented: "Amidst a challenging environment of evolving media consumption behaviour, the Group is reviewing new growth opportunities whilst exploring ways to reinvigorate its core media business. In this respect, we have engaged a strategy consultant and work has been ongoing for the last six months with various teams working on several initiatives.
"Good progress has been made. We have identified various initiatives which, when implemented, would generate cost savings of about $19 million a year. Two examples of such initiatives relate to reducing newspaper returns and workflow changes to better utilise the printing presses. The project team is also working on a host of other initiatives to further improve revenue and profit.
"To grow our media business, I am pleased to add that we will be establishing a $100 million New Media Fund to invest in media-related businesses. These investments will play a critical role to support our aspiration to be the leading multi-media company in Asia. "
The Directors of SPH have proposed a Final Dividend of 15 cents per share, comprising a Normal Dividend of 8 cents per share and a Special Dividend of 7 cents per share in respect of the financial year ended 31 August 2013. These dividends are on tax-exempt (one-tier) basis and will be paid on 20 December 2013. Together with the Interim Dividend of 7 cents and Special Dividend in relation to the listing of SPH REIT of 18 cents, total Dividend payout for FY2013 will be 40 cents.