Singapore Press Holdings (SPH)

[Musicwhiz]

The Straits Times
Oct 13, 2011
SPH posts $389m in full-year profit
Fall of 22% largely due to absence of one-off gain from condo project

By Aaron Low

STRONG advertising sales and rental income helped Singapore Press Holdings (SPH) record another solid set of full-year results.

The media and property group posted $388.6 million in net profit for the year ended Aug 31, down 22 per cent on the $497.9 million racked up a year ago.

The earnings decline was largely due to the $154 million in profit recorded the previous year from SPH's condominium project Sky@eleven, which has since been completed.

The Sky@eleven boost was also mainly why group operating revenue slid 9.4 per cent to $1.25 billion for the year.

But it was still the seventh consecutive year the figure has exceeded $1 billion, said SPH acting chairman Cham Tao Soon.

'Our creditable performance was underpinned by higher advertisement revenues, robust growth in rental income and continued progress in our exhibitions and online businesses,' he said at a briefing yesterday.

The flagship newspaper and magazine business continued to perform well, with operating revenue up 4 per cent, or $39 million, to $1.01 billion.

Professor Cham said that despite competition from online and other media platforms, total newspaper circulation held its ground, ceding just 0.2 per cent.

But the average daily circulation for the firm's biggest newspaper, The Straits Times, rose by 0.6 per cent to 354,654 copies, while The Business Times rose by 1.5 per cent. Tamil Murasu surged 15.3 per cent to 16,747 copies.

Print advertisement revenues rose by $41.6 million, boosted by strong display ad sales. Circulation revenue fell slightly by $1.9 million.

Property rental income, mainly from Paragon and the newly opened Clementi Mall, soared 24.9 per cent to $167.9 million.

Clementi Mall, which opened in May, is fully occupied and contributed $18.4 million in rental income.

Operating revenue from the group's other businesses, including exhibitions and digital media, jumped 37.3 per cent to $69.8 million.

The good set of results means shareholders will receive a final dividend of 17 cents, comprising a normal dividend of nine cents and a special dividend of eight cents.

Combined with the interim dividend paid out earlier, total dividend payout for the year will be 24 cents a share.

Earnings per share fell seven cents from the previous year to 24 cents, while net asset value held steady at $1.39.

Chief executive Alan Chan said SPH will continue to look for investment properties but is likely to focus on managing shopping malls.

'The expertise of SPH really lies in mall management, mainly Paragon and Clementi Mall. So going forward, we will be looking for more of these shopping malls to acquire,' he said.

He also addressed a question about the long-term prospects of the core newspaper business, given that newspapers in developed countries are seeing falling circulation.

Mr Chan noted that despite the fact that there are many media platforms and choices for advertisers, SPH's newspapers provide a compelling case for the advertising dollar.

'We are very efficient. The Straits Times, for example, reaches 1.4 million readers every day. And once you buy one ad in The Straits Times, you reach out to almost everyone who matters,' he said.

'This is an area we will defend vigorously.'

For the next year, Mr Chan said the 'outlook remains uncertain amid global economic woes'.

'The group will continue to leverage on its key strengths and synergies to deliver shareholder value. Print advertisement revenue will continue to move in tandem with the performance of the Singapore domestic economy,' he said.

SPH shares closed four cents higher at $3.78 yesterday.

aaronl@sph.com.sg

[yeokiwi]

Chief executive Alan Chan said SPH will continue to look for investment properties but is likely to focus on managing shopping malls.
'The expertise of SPH really lies in mall management, mainly Paragon and Clementi Mall. So going forward, we will be looking for more of these shopping malls to acquire,' he said.

Such an interesting comment.
SPH should change name to SMH.(Singapore Malls Holdings.)

[Musicwhiz]

Such an interesting comment.
SPH should change name to SMH.(Singapore Malls Holdings.)

When the core business is stagnant or declining, I guess that's when Management seeks to "diversify" its income sources!

[Drizzt]

we need to see a stalling profit from advertising but declining circulation. this would mean that the new initiatives are replacing old media channels.

[Qiaofeng]

we need to see a stalling profit from advertising but declining circulation. this would mean that the new initiatives are replacing old media channels.

Perhaps, a metric to look at could be the ratio of circulation to resident population.
And U could even go one level further to look at the English, Chinese and Tamil papers.
This could explain why Tamil Murasu surged 15.3 per cent to 16,747 copies.
Resident population has increased quite significantly for certain ethnic groups.
Then U could draw some conclusions as to whether the circulation has been increasing in tandem with the increase in resident population.

[pianist]

Chief executive Alan Chan said SPH will continue to look for investment properties but is likely to focus on managing shopping malls.
'The expertise of SPH really lies in mall management, mainly Paragon and Clementi Mall. So going forward, we will be looking for more of these shopping malls to acquire,' he said.

Such an interesting comment.
SPH should change name to SMH.(Singapore Malls Holdings.)

in a way i see it as a monopoly flexing its muscles fueling rental/property price inflation...even food price is indirectly affected by the seemingly higher food stall rental charged by landlord

[Drizzt]

we need to see a stalling profit from advertising but declining circulation. this would mean that the new initiatives are replacing old media channels.

Perhaps, a metric to look at could be the ratio of circulation to resident population.
And U could even go one level further to look at the English, Chinese and Tamil papers.
This could explain why Tamil Murasu surged 15.3 per cent to 16,747 copies.
Resident population has increased quite significantly for certain ethnic groups.
Then U could draw some conclusions as to whether the circulation has been increasing in tandem with the increase in resident population.

thanks QF. it looks like if lianhe zaobao and wan bao and tamil papers increase we know its due to population increases

but how do u measure that new media is replacing old media?

[Ben]

From next month onwards, moneylenders will be banned from advertising their services in newspapers or pamphlets. This is going to affect the legal moneylending business badly and a setback to SPH advertising revenue. Moneylending advertising took up pages and pages of ads in SPH various papers and I reckons it adds up to a significant amount. But of more concerns is that is this going to boost illegal moneylending activities?

[Qiaofeng]

we need to see a stalling profit from advertising but declining circulation. this would mean that the new initiatives are replacing old media channels.

Perhaps, a metric to look at could be the ratio of circulation to resident population.
And U could even go one level further to look at the English, Chinese and Tamil papers.
This could explain why Tamil Murasu surged 15.3 per cent to 16,747 copies.
Resident population has increased quite significantly for certain ethnic groups.
Then U could draw some conclusions as to whether the circulation has been increasing in tandem with the increase in resident population.

thanks QF. it looks like if lianhe zaobao and wan bao and tamil papers increase we know its due to population increases

but how do u measure that new media is replacing old media?

http://www.singstat.gov.sg/stats/themes/.../popn.html
http://www.singstat.gov.sg/stats/charts/popn-area.html
Yr………....2005…..…2006…….2007……….2008…….2009………2010…….2011
RP……….…3467.8.…3525.9….3583.1……3642.7….3733.9…..3771.7…..3789.3
RP- Resident Popn
DelRP - change in % of RP
DelST cir - change in % of ST circulation
Yr2/Yr1………...06/05……07/06……08/07……09/08…….10/09…….11/10
DelRP……….…..1.7% …….1.6%........1.7%........2.5%.......1.0%.........0.5%
DelST cir………-0.8%…………1.3%……-0.8%…….-0.8%.......-2.8%.........?

DelST from Fact Sheets over the years
eg.... http://www.sph.com.sg/pradmin/upload/ycC...Sheets.pdf


Drizzt,
In the table above I compared the major revenue earner ST (Straits Times) circulation change, over the years with resident population change.
U can see for Urself whether they are losing foothold in the ST circulation. Probably, not alarming yet, up to 2009, but increasing.
TM (Tamil Murasu) is showing great leaps; ostensibly due to net migrants.
The YoY change for Zaobao/Wanbao actually looks quite bad, U can do this Urself and maybe show in Ur blog for readers to look at; implying that the benefit from net Chinese migrants (evidenced by the wanbao newstands in Geylang) are negated by locals reading more English papers than Chinese papers despite the bilingual campaigns.
The Fact Sheet is up to 2009 so it will be interesting to know 2010 and 2011 figures and whether the blitz to promote subscriptions helped.
Remember circulation figures are not the same as revenue figures from subscriptions as they raised newspaper prices over the years.

IF U include and account for the +ve resident population change, the 2009 figure is a loss of 3.8% (-2.8% - 1.0%)

[Drizzt]

thanks Qiao Feng. i am trying to make sense of all the dots.does this mean pop up circulation down in general even factoring the immigrants? sounds bullish if u ask me