Sky @ Eleven Will Boost SPH Earnings: Tony Tan

Source : The Business Times, December 6, 2007

Analysts estimate project to yield up to $450m profit

SINGAPORE Press Holdings is expecting a significant boost to its profits for this financial year and the next - from its Sky@eleven condominium project. In his speech at the media group's annual general meeting yesterday, SPH chairman Tony Tan said:'On the property front, our launch of Sky@eleven, a luxury condominium project at Thomson Road, was greeted with overwhelming response. All 273 units were sold out within hours of the soft launch in January 2007.

' SPH will enjoy a significantboost to its profits in the next two financial years from contributions from Sky@eleven.'

'The last financial year has been a good year for SPH,' said Dr Tan. 'With group operating revenue of $1.16 billion, net profit attributable to shareholderscrossed the half-billion mark to hit $506.2 million.'

The group's $506.2 million net profit was 18.1 per cent higher than the previous year's $428.5 million, which included an exceptional gain of $66.8 million.

The FY2007 results includeda maiden profit recognition of $47.8 million from Sky@eleven. Profits from Sky@eleven are being recognised on a percentage-of-completion basis and temporary occupation permit (TOP) is expected in early 2010.

Analysts had estimated total profitsfrom the project at $350 million to $450 million.

At yesterday's AGM, some shareholders were concerned about the group's core print business, citing trends of declining newspaper readership in other developed countries.

Another shareholderasked about generating more revenue from online media. Responding, Dr Tan said that the group is continuing to invest in other media platforms.

'$100 million has been earmarked to invest in the Internet (business). So when the trends overseascome to Singapore, SPH will be prepared and be in a good position to exploit the online space.'

Like any new business venture, building revenue from online services will take time, he said.

Dr Tan also said that SPH is making furtherinroads into the online search business. Online search and directory services for the China and Singapore market are expected to be rolled out next year, as well as regional online classifieds, he said.

Both are part of the joint venture formedlast year with Norwegian media group Schibsted ASA. 'Online directory portals will be the future for SPH,' Dr Tan said.

The traditional core newspaper and magazine business continued to make up the bulk of profits for the group, and investing inits current stable of papers continues.

Singapore's first Chinese freesheet my paper will be revamped into a full-fledged bilingual newspaper early next year. It will have equal emphasis on the Chinese and English languages and will be expandedinto a 48-page paper from its current 24-page format.

'Circulation of our other newspapers, such as The Business Times, Berita Harian and Tamil Murasu, also registered creditable increases on the back of strong support from readers andadvertisers,' said Dr Tan.

SPH announced yesterday that directors Cheong Choong Kong and Lee Ek Tieng would step down. Dr Cheong was appointed a director of SPH in 1997. Mr Lee joined SPH as a director in 2001.