UPDATE: SPH: Fiscal year net profit fell nearly 20 percent amid year-earlier gain

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

Singapore Press Holdings reported on Monday that its fiscal year net profit fell 19.7 percent on-year to S$281.11 million on the absence of a year-earlier one-off gain from a divestment of a joint venture.

That was due to a gain of S$149.7 million on the sale of SPH’s stake in the online classifieds business in Malaysia, Vietnam and Myanmar, as well as an impairment charge, the media and property company said in a filing to SGX after the market close on Monday.

Excluding that gain, net profit attributable to shareholders would have risen by 2.4 percent on-year, SPH said.

Group operating revenue fell 4.8 percent on-year in the fiscal year ended 31 August to S$982.6 million, it said in a filing to SGX after the market close on Monday. Operating profit for the fiscal year was S$206.35 million, up 0.4 percent on-year, it said.

Media revenue falls

SPH said the core media business remained profitable, with revenue declines moderating.

“Print continues to experience headwinds, but we are seeing encouraging results from our efforts to digitise the core Media Business,” Ng Yat Chung CEO of SPH, said in the statement.

SPH said it would continue to invest in digital initiatives, especially as it looks to data analytics, AI and other automation technologies to “enhance the readership experience.”

Revenue for the media business declined 9.6 percent on-year to S$655.8 million as advertising and circulation revenue fell, SPH said.

It said the media segment posted a profit before tax of S$92.1 million, up 246 percent on-year, on year-earlier impairment charges. Excluding the year-ago impairment charges, operating results fell 18.9 percent on-year, with the advertising and circulation revenue decline somewhat offset by costs savings on newsprint, staff costs and depreciation charges, it said.

Property revenue slips

Property segment revenue slipped 0.7 percent on-year to S$242.42 million, with profit before tax for the year falling 10.4 percent on-year to S$197.5 million, SPH said.

The decline was partly on lower fair value gains of investment properties, slightly lower revenue and financing costs for the Woodleigh development and fees related to acquisitions, it said.

Finance costs increased 19.8 percent on year in the fiscal year to S$37.51 million, mainly on interest costs on a S$280 million term loan during the year to fund the development of The Woodleigh Residences and The Woodleigh Mall, SPH said.

The ground-breaking for the project was in March 2018, with the residential units expected to be launched for sale soon, it said.

“The property segment remains the largest contributor to group profit, providing a steady income stream for SPH,” it said.

Other revenue grew 34.0 percent on-year during the year to S$84.36 million, mainly on contributions from the aged-care business, it said.

Other operating income rose 18.5 percent on-year to S$23.12 million for the year, mainly on a gain from MindChamps Preschool’s IPO diluting its interest, it said.

Investment income surged 113.8 percent on-year to S$115.2 million on gains from portfolio divestments, SPH said.

Outlook

SPH noted that in September, it made its first investment in the purpose-built student accommodation (PBSA) sector, acquiring 3,436 beds in the U.K. for S$321 million.

“The acquisition is part of a strategy to expand the group’s asset management business to acquire cash-yielding assets in multiple defensive sectors,” SPH said, adding it planned to build on the initial PBSA acquisition to develop a “sizeable plaform” and “domain expertise.”

Dividend

SPH declared a final dividend of 3 Singapore cents a share and a special dividend of 4 Singapore cents a share, compared with 3 Singapore cents and 6 Singapore cents respectively a year earlier. The total dividend payout for the fiscal year will be 13 Singapore cents, it said.

The dividend will be payable on 21 December, it said.

This article was originally published on Monday 15 October 2018 at 18:16 SGT; it has since been updated. 

 

Get the Shenton Wire morning briefing in your inbox