SPH’s 1Q12 Profit Edges Down 4.7%
Singapore Press Holdings’ (SPH) profit edged down 4.7% to $97.5 million for the first quarter ended 30 November. The dip in profit was largely due to lower investment income, despite the rise in recurring earnings. Operating revenue increased 4.3% to $332.4 million, helped by growth in its property segment as well as Internet and exhibitions businesses which together cushioned the fall in contribution from its core newspaper and magazine segment. This led recurring income to rise 4.2% to $121.2 million, however it was withered down by a sharply lower net income from investments due to unrealised foreign exchange losses in light of volatility in the financial markets. Earnings per share was unchanged at $0.06.
Significance: Against a backdrop of weaker external market, the Singapore economy is expected to slowdown and growth in SPH’s core newspaper and magazine segment is likely to be subdued. Providing support will be rental income from its property segment, specifically, Paragon and Clementi Mall are fully leased and will provide a steady recurrent income stream.
CapitaLand-Led Consortium Seals Rmb21.1b Chongqing Project
CapitaLand has led a consortium, established with CapitaMalls Asia and Singbridge Holdings, to seal a cooperation agreement with the Chongqing government. The deal involved a Rmb21.1 billion mixed-use development project in the Chao Tian Men area – a prestigious site in the heart of the densely developed Yuzhong district situated at the confluence of the Yangtze and Jialing Rivers. The development project is said to be the largest in the city, in terms of both land size and investment quantum, in a decade. CapitaLand and CapitaMalls Asia will each hold a 25%-stake, while Singbridge Holdings will hold a 30% interest with the balance 20% being held by unrelated parties.
Significance: CaptiaLand is bullish about the growth outlook of Chongqing, noting that its economy ‘is the fastest-growing in China with 17.1% gross domestic product (GDP) growth in 2010, well above the national average of 11.2%.’ Along with the GDP growth, demand across various real estate sectors will rise and the developer is set to ride the upswing.
DTAC Sets THB40b Investment Over Next Three Years
Total Access Communication (DTAC), Thailand’s second-largest mobile phone operator by subscribers, is set to invest THB40 billion ($1.62 billion) over the next three years. The operator is competing with market leader Advanced Info Service and the third-ranked True Move. Commenting on the investment quantum, chief executive officer Jon Eddy Abdullah said that it would include the cost of licences for a 2.1 gigahertz frequency spectrum to facilitate third-generation (3G) mobile phone services which is expected to be auctioned in the third quarter of this year. Other utilisation would be to cover network expansion for existing and new frequencies.
Significance: The planned investment will sharpen TAC’s competitive edge, particularly in the field of 3G mobile services. Thanachart Securities rated its shares a ‘Buy’, noting the ‘interesting value and high dividend yield.’