Impairment charges, which mainly related to its magazine business, dealt a blow to Singapore Press Holdings' (SPH's) third-quarter net profit, which declined 45.2 per cent from the same period a year earlier to $28.9 million.
The media and property firm said yesterday it had to make impairment charges of $37.8 million as the performance of the magazine business continued to deteriorate amid unfavourable market conditions.
At the operating level, group recurring earnings for the three months ended May 31 fell 43.6 per cent from the same period a year ago to $34.3 million. Excluding the impairment charges, group recurring earnings would have fallen by 19.2 per cent, dragged down by a decline in media revenue.
Group operating revenue slid 10.8 per cent year on year to $260 million, as the media business continued to be hurt by the disruption of the industry and a muted economic environment.
The media business saw a 15.7 per cent year-on-year fall in operating revenue in the third quarter, as advertisement revenue fell 18.7 per cent and circulation revenue declined 10.6 per cent from the same period a year earlier.
Despite a depressed retail environment, the property segment delivered 2 per cent revenue growth from the third quarter a year ago, on the back of higher rental income from SPH's retail assets.
The property business comprises the company's investments in SPH Reit-held Paragon and Clementi malls, and the directly owned Seletar Mall.
AT A GLANCE
$28.9 million (-45.2%)
$260 million (-10.8%)
Revenue from SPH's other businesses was 8.2 per cent higher, as the maiden contribution from newly acquired nursing home operator Orange Valley Healthcare was partially offset by lower revenue from the exhibitions business.
Earnings per share fell to two cents in the third quarter from three cents in the same period a year earlier, as net asset value per share dropped to $2.06 at the end of May, from $2.18 nine months ago.
SPH completed the sale of 701Search last month and expects to recognise a profit of about $150 million from the divestment in the next reporting period, the company said.
Chief executive officer Alan Chan said SPH "will forge ahead with its drive to transform the core media business". "We have pursued other growth opportunities to diversify revenue streams. To date, we have made steady progress with the recent acquisition of Orange Valley Healthcare and our joint venture winning the tender to develop a mixed commercial and residential site at Bidadari," he said.
SPH shares ended the day six cents higher at $3.11 before the results were announced.