SPH reports 21.9 per cent drop in profit to $69.5m

Singapore Press Holdings has reported a net profit of $69.5 million for the first quarter ending November 30, 2014, a 21.9 per cent drop compared to the corresponding period last year.

Group recurring earnings totalled $102.3 million, a decrease of $14.5 million or 12.4 per cent in the corresponding period.

The decline was due to a drop in performance by the publisher’s newspaper and magazine business, because of a “tepid and uncertain macro-economic environment and general softening of the advertising market”.

Advertising in the sector was down by $16 million, or 8 per cent, and circulation revenue by $3.2 million, or 6.8 per cent.

Group operating revenue hit $3.07 million, a $21.4 million or 6.5 per cent decline from Q1 2014.

The property segment remained stable with revenue climbing $0.6 million, or 1.2 per cent, to $51.4 million, while strong performance from SPH’s local online classified and radio businesses offset a dip in revenue from other businesses including exhibitions, which dropped by $1.8 million to $20 million.

“The global macro-economic outlook remains muted and fraught with lingering concerns over a confluence of risk factors including rising interest rates, deflationary pressures, geopolitical tensions and a global pandemic outbreak,” SPH chief executive Alan Chan said.

“Against this backdrop and a tight labour market in Singapore, the domestic economy is expected to post modest growth.”

SPH marked the beginning of the 2015 financial year with new initiatives in the digital sphere, acquiring a 60 per cent stake in Singapore real estate service CoSine Holdings and signing a major deal that will see it develop joint ventures in Brazil, Indonesia, Thailand and Bangladesh for the development of online classifieds platforms.

The joint venture deal, which was initially formulated and announced in November last year, is between SPH, internet services and ecommerce operator Naspers Limited, Norwegian media company Schibsted Media Group and Norwegian telecommunications company Telenor Group.

SPH said that building a presence in those international markets would bring “substantial benefits to consumers”, as combining the platforms would make it “faster and easier for people to trade and turn their items into cash”.

SPH’s ownership stake in each market will be represented by 701Search, an equal partnership joint venture that it established with Schibsted and Telenor.

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