SPH reports third quarter net profit rose 64 percent as impairment charges fell

Straits Times reading sculpture at Changi AirportStraits Times reading sculpture at Changi Airport

Singapore Press Holdings reported its fiscal third quarter net profit rose 64.3 percent on-year to S$47.4 million due to lower impairment charges.

Group operating revenue for the quarter ended 31 May fell 3.8 percent on-year to S$250.1 million, while group recurring earnings, or operating profit, rose 29.6 percent on-year to S$44.4 million, it said in a filing to SGX after the market close on Wednesday.

The company reported impairment charges on goodwill and intangibles of S$22.3 million in the third quarter of this year, compared with S$37.8 million in the year-earlier quarter; the charges in the third quarter of this year were primarily related to the online classifieds business due to challenging market conditions, it said.

Excluding the impairment of goodwill and intangibles, operating profit would have fallen 7.4 percent on-year, it said.

The rebound in net profit came despite the media business revenue falling 8 percent on-year to S$167.9 million in the quarter, it said.

SPH said it was working to boost its “first to digital” initiatives to grow its digital revenue in the media business, adding it was seeing good results with the daily average digital circulation copies up by 121,000 on-year in the quarter. It noted that its e-paper, or PDF version of the print paper, saw more than 37,000 unique readers for the Straits Times alone, or more than 15 percent of the total ST circulation.

Property segment revenue was also lower, falling 2.4 percent on-year to S$60.1 million, it said, noting that property accounts for nearly 60 percent of the group’s profit and has provided a steady income stream and stability to the company’s performance.

Revenue from the other businesses rose 38.5 percent on-year in the quarter to S$22 million, on contributions from the aged care and education businesses, it said.

“As we continue to sharpen our media capabilities in the face of digital disruption, we are seeing early signs of a slower decline of our media revenue,” Ng Yat Chung, CEO of SPH, said in the statement. “At the same time, we are making efforts to diversify, with new growth thrusts. Our new strategy is to focus on the acquisition of cash-yielding real estate assets overseas. We are also preparing the aged care business for overseas expansion.”

The statement said SPH was monitoring the potential impact of the introduction of a fresh round of property cooling measures in Singapore last week on its joint residential property project, Woodleigh Residences.

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