Singapore Press Rises on Newspaper and Magazine Sales

Singapore Press Holdings, Asia's largest newspaper publisher by market value, rose the most in almost a month in Singapore trading after posting better-than-expected quarterly revenue.

The Straits Times publisher climbed 1.8 percent to S$4.51 at the 5:05 p.m. close of trading in Singapore, its biggest gain since March 18. The company's shares are up 0.2 percent since the start of the year, beating the 11.8 percent drop in the benchmark Straits Times Index.

The publisher said second-quarter revenue from its newspaper and magazine division rose 8.4 percent to S$236.4 million ($174 million). The company, which has 14 newspapers and is adding new businesses such as digital media services, benefits from strong consumer sentiment in the city-state, DBS Group Holdings Research said in a note.

“We believe the group can post double-digit earnings growth for the full year for this business even with a slower second half,” DBS Group analyst Paul Yong said in the report.

“We continue to like SPH for its attractive valuation and as a defensive stock.”

Citigroup Global Markets and Credit Suisse Group also referred to Singapore Press as a “defensive” stock in reports to clients.

Sales from Singapore Press' property unit almost doubled to S$54.3 million, the company said in a statement to Singapore's stock exchange. Net income for the three months through February fell 6.3 percent to S$99.6 million.

The company is adding businesses, including a search engine and outdoor billboards, to boost growth as advertising revenue slows. Advertising growth will be “moderate” this year, it said, as Singapore's economic growth may slow to 6 percent from
7.7 percent in 2007.

Yong lowered estimates for the company's investment income and said Singapore Press' Sky@Eleven apartment complex project may be delayed because of a labor shortage and bad weather.

Citigroup cut its forecast for Singapore Press' earnings in 2008 and 2009 by between 5 percent and 8 percent.

Investment income in the second quarter fell to S$5.1 million from S$31.6 million a year earlier. Last year's income included gains from the sale of investments, dividend from its stake in MobileOne and profit from a payout by StarHub.

MobileOne and StarHub are two of Singapore's three mobile-phone companies.