SPH reports third quarter net profit of $89.6 million

SINGAPORE - Singapore Press Holdings Limited (SPH) today reported its results for the third quarter ended May 31, 2014 (3Q 2014). Net profit attributable to shareholders of $89.6 million was $97.9 million (52.2 per cent) lower compared to 3Q 2013, as last year's results were boosted by a one-off fair value gain on investment properties of $111.4 million arising from a change in recognition from cost to fair value basis.

Group operating profit of $98.4 million was $6.9 million or 7.5 per cent higher than the corresponding period. In tandem with the Group's continued emphasis on cost discipline and efficiency gains, total costs fell by $23.2 million (9.7 per cent) which more than offset the reduction in total revenue of $16.3 million (4.9 per cent).

Investment income surged $21.3 million to $24.5 million, lifted by higher dividend income and lower impairment charges on portfolio investments.

Group operating revenue of $309.7 million was $15.2 million (4.7 per cent) lower compared to 3Q 2013, with reduced contribution from the Newspaper and Magazine business as advertisement and circulation revenue were down by $16.2 million (8.2 per cent) and $2.9 million (5.8 per cent) respectively.

The decline in Newspaper and Magazine business was partially negated by stronger revenue performance from the Group's other businesses, which registered growth of $3.7 million (23.8 per cent) led by higher contributions from online classified and radio business. The property segment also did better, with revenue inched up $0.8 million (1.6 per cent) on the back of higher rental income and full occupancy rates.

Operating costs in the current quarter remained well contained, as the Group pushed ahead with its cost initiatives to attain higher efficiencies. Excluding the impairment charge of $15.6 million relating to an overseas subsidiary last year, total operating expenditure of $214.5 million was down $7.5 million (3.4 per cent) against the corresponding period last year, mainly due to reduced production and business promotion costs.

For the year-to-date ended May 31, 2014, Group operating revenue was lower by $12.3 million (1.3 per cent) while total costs rose by $7.3 million (1.1 per cent). Net income from investments of $24.1 million was $13.6 million higher than the corresponding period last year. Net profit attributable to shareholders of $259.7 million was $98.5 million (27.5 per cent) lower than last year's $358.3 million which included one-off fair value gain on investment properties of $111.4 million.

On the outlook for FY2014, Mr Alan Chan, Chief Executive Officer of SPH commented: "In response to the rapid changes in the media industry and structural shifts in consumer behaviour, the Group has embarked on a journey of restructuring and transformation. To-date, we have made progress and the Group will continue to intensify its efforts to address the evolving media landscape whilst pursuing growth opportunities."