Singapore, 16 October 2001 - Main board listed Singapore Press Holdings Limited ("SPH") today reported its full year results which saw a 18.7% drop in net profit to $340.8 million for the financial year ended 31 August 2001. Compared to the same period last year, trading profit fell by 24.4% to $314.4 million while turnover dropped marginally by 2.1% to $1.03 billion amid the global economic slowdown.
Earnings per share dropped to $0.92 from $1.13 last year, while net tangible asset backing per share increased from $5.55 to $5.82. The directors of SPH propose to pay a final dividend of 50 cents per share, subject to the approval of shareholders at the annual general meeting to be held in January 2002.
"Despite the competition and global economic slowdown, the core newspaper business performed satisfactorily in the financial year. Print advertisement revenue of $764.3 million was the second highest in the history of SPH, 5.0% below last year’s record high of $804.3 million," said Mr Lim Kim San, Executive Chairman of SPH.
"However, the Group’s trading profit was affected by higher newsprint prices and start-up losses." he added.
Newsprint cost increased by $30.9 million (22.0%) compared to the previous financial year due to higher newsprint prices and a weaker Singapore dollar against the US dollar. Newsprint prices have however fallen in the current financial year, which will help to cushion the drop in advertisement revenue.
New publications, Streats incurred a trading loss of $5.6 million and Project Eyeball, $8.1m. Project Eyeball has suspended publication since 29 June 2001. The TV news production units within SPH, responsible for providing the news and current affairs programmes to subsidiary, SPH MediaWorks, registered a trading loss of $3.9 million for the year.
SPH MediaWorks, SPH’s new broadcasting venture, reported a turnover of $16.6 million and trading loss of $42.5 million for the financial year. The trading loss was higher than earlier envisaged due to lower advertisement revenue as a result of the economic slowdown and lower than anticipated performance of it’s English channel, TV Works. The Chinese channel, Channel U has already achieved one-third ratings share of the Mandarin market and it is now the number 2 TV channel in Singapore.
SPH AsiaOne, SPH’s public-listed Internet subsidiary, had earlier reported a loss of $14.9 million despite a higher turnover of $9.6 million. SPH and SPH AsiaOne had jointly announced on 3 October 2001 a proposed scheme of arrangement to privatise SPH AsiaOne as a wholly owned subsidiary of SPH. The scheme, if approved, is expected to result in an approximately 8.3 cents net decrease in net tangible asset per share and an approximately 10.0 cents net increase in the earnings per share of SPH for the current financial year.
Commenting on the prospect for the current financial year, Mr Lim said "Events since September 11 have clouded visibility for the Group and the present downturn will be more severe and prolonged than initially envisaged. We expect advertisement revenue to fall, in line with this downturn and the Group would be taking appropriate cost containment measures on all fronts to ride out this difficult period."
SPH has already taken steps to better manage cost in the last few months. The Straits Times has been converted to a narrower width since September 2001 to reduce newsprint consumption. It has also cut back on it’s loss making operation, Project Eyeball. The proposed privatisation of SPH AsiaOne would enable the company to right size the operations commensurate with the pace of growth.
"We will be implementing a wage freeze and cut with effect from 1 November 2001. This measure, together with the lower newsprint prices and other cost cutting measures would result in cost savings of around $35 million. Should the privatisation of AsiaOne be approved, there would be a realisation of $37m in net profit which could further cushion the expected drop in the advertisement revenue."
"In addition to the final dividend of 50 cents per share, the Board has also proposed to return 25 cents per share out of the share premium account to shareholders, subject to the approval of shareholders at an extraordinary general meeting to be convened. This cash distribution would be helpful in this difficult time to shareholders, who may have better alternative use of the cash," Mr Lim added.
Issued By: SINGAPORE PRESS HOLDINGS
Audited Results for the Year, August 31, 2001. please click here.
For more information, please contact:
Mr Liew Kim Siong
Singapore Press Holdings
Tel: 740 1216
Fax: 747 3835