UPDATE 1-Singapore Press profit hit by poor investment gains

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By Melanie Lee

SINGAPORE, July 11 (Reuters) - Singapore Press Holdings (SPRM.SI: Quote, Profile, Research), Southeast Asia's biggest newspaper publisher, suffered a 15.6 percent decline in quarterly profit after investment gains were hit by turmoil in the world's financial markets.

Investment income for the three months to the end of May plunged nearly two thirds, it said in a statement. But it added that investment earnings a year ago included proceeds from a capital cut by MobileOne (MONE.SI: Quote, Profile, Research), in which it owns a stake. Net profit for the first nine months of the year fell 8 percent.

Singapore Press, which has a near monopoly on newspaper publishing in Singapore and owns the pro-government daily Straits Times, reported net profit of S$133.4 million ($98 million) in the three months to May compared with S$158 million a year ago.

"The Singapore economy is forecasted to grow at a more moderate pace in 2008. Advertising revenue...is expected to perform in tandem with the economy," Chief Executive Alan Chan said in a statement.

Total operating costs increased 15.6 percent, reflecting an increased headcount for one of its properties. But rental income at its most valuable asset, the swanky "Paragon" mall on the Orchard Road shopping belt, increased 12 percent. The mall was valued at S$2 billion last month.

Investment gains plunged to S$25.7 million from S$75.3 million a year ago.

SPH said circulation of its flagship Straits Times newspaper fell 0.7 percent year-to-date. It expects newsprint prices to increase due to higher raw material and energy costs.