SPH posts fiscal year swung to net profit on improved performances from retail and commercial and student housing

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

Singapore Press Holdings (SPH) reported Tuesday its fiscal year swung to a net profit of S$92.94 million from a year-ago net loss of S$83.68 million, with the company citing an improved performance across all segments, including retail and commercial and purpose-built student accommodation (PBSA).

Revenue for the year ended 31 August increased 2.4 percent on-year to S$475.08 million, in part on lower tenant rental relief for retail tenants, SPH said in a filing to SGX.

Operating profit for the fiscal year increased 69.8 percent on-year to S$206.7 million on continuing operations, SPH said.

SPH proposed a final divided of 3 Singapore cents a share, bringing the full-year dividends to 6 Singapore cents, compared with 2.5 Singapore cents for the previous year.

Media business

Revenue from the media business fell 17.5 percent on-year on lower advertising revenue and circulation revenue as well as lower Job Support Scheme revenue, the filing said.

During the fiscal year, the company undertook a strategic review and in May, announced plans to restructure the media business, the statement said. The media business is being transferred to a non-profit company limited by guarantee, with the transition expected to be completed in December, the filing said. The media business is considered discontinued operations in the results, the filing said.

The media business posted an operating loss of S$38.7 million for the year, similar to the S$40.1 million loss in the previous year.

“The losses were contained due to extensive cost savings and reduction initiatives despite the continued secular decline of print media revenue. Going forward, there is less scope for major cost cuts without impairing the core media capabilities,” SPH said.

In the fiscal 2022 results, an additional loss of around S$115.5 million will be recognised after the media restructuring is completed, SPH said.

Retail and Commercial

The retail and commercial segment posted profit before tax of S$206.9 million, compared with a loss of S$56.2 million in the year-ago period.

“Among the factors for the improvement included higher rental revenue and lower tenant rental relief as sales gradually recovered alongside the market. Another reason contributing to FY2021’s improved results was the first full year’s contribution from Westfield Marion, the largest mall in South Australia,” SPH said.

In addition, The Woodleigh Residences, located in Bidadari Estate next to Woodleigh MRT station, posted an uptick in sales, with around 75 percent of the development sold as of 20 September, SPH said. The average price per square foot has improved to around S$1,970, up from S$1,923 in March, SPH said.

“The group will continue to expand this segment while driving growth and diversification into adjacent asset classes with strong recurring income. SPH REIT is also able to leverage on its low gearing ratio and strong sponsor stake to resume growth and diversify its portfolio once the Covid-19 situation stabilises,” the filing said.

PBSA

The PBSA segment posted a pre-tax profit of S$71.8 million, swinging from a year-ago loss of S$24 million, amid higher rental revenue and the full-year contribution from the Student Castle portfolio acquired in December 2019.

“SPH is on track to be a leading player in the U.K. PBSA market. With a full suite of fund management and in-house property management capabilities, SPH will leverage the defensive nature of the asset class and strong market fundamentals to expand,” SPH said.