Singapore Press Holdings (SPH) saw its net profit for the first quarter to Nov 30 fall 17.2 per cent to $46.3 million, as contributions from its media segment continued to slide - though somewhat mitigated by property takings.
The mainboard-listed group, which publishes The Straits Times, reported an operating revenue of $243.98 million for the three months, or 4.1 per cent lower year on year. The decline was mainly due to lower newspaper print advertisement revenue, it announced in a regulatory filing yesterday.
However, improved revenue from an expanded student accommodation portfolio and SPH Reit, the real estate investment trust SPH owns a 70 per cent stake in, helped offset to some extent the decline in the media performance.
Total costs, on the other hand, climbed 6.1 per cent, greater than the fall in operating revenue. This saw operating profit down by 27.9 per cent year on year to $53.94 million from $74.84 million.
SPH attributed the increase in costs partly to higher operational costs from the enlarged student accommodation portfolio and SPH Reit. Besides these, there was a one-time cost of $7.2 million arising from retrenchment in the media segment last October. Excluding the cost of that rationalisation exercise, underlying operating profit would have been 18.3 per cent lower at $61.1 million instead.
Earnings per share was flat at three cents while net asset value per share was marginally down to $2.14 as at Nov 30, from $2.16 the preceding three months.
Performance of its media and property segments was mixed, with the former continuing to face headwinds.
SPH chief executive Ng Yat Chung said: "Our core media business remains challenged as advertisers cut back on their advertising due to the uncertain business outlook. However, we are encouraged by the response to our digital transformation initiatives including the News Tablet campaign."
The Straits Times is the latest to launch its News Tablet package, after Lianhe Zaobao and Berita Harian. Within three weeks of the Dec 18 launch, there were more than 5,000 sign-ups, over half of them from new subscribers.
Newspaper circulation volume was about 8.1 per cent higher - the first increase after four quarters. The ongoing News Tablet campaign partly helped to lift daily average digital sales, which jumped by 49.8 per cent or 109,092 copies. This outstripped the 10.3 per cent drop in daily average print sales or 51,010 fewer copies. However, circulation revenue was 4.3 per cent or $1.5 million lower for the quarter.
On property, Mr Ng noted the recent addition of 2,383 beds to the group's UK purpose-built student accommodation portfolio and the expansion of SPH Reit into Adelaide, taking a 50 per cent stake in its largest shopping centre, after the first quarter "will strengthen our efforts to boost recurring income from the property segment".
In aged care, SPH will tap its partnership with Japanese asset manager Bridge-C to seek expansion opportunities overseas.
SPH shares closed at $2.18 yesterday, down 0.46 per cent.
THE BUSINESS TIMES