SINGAPORE PRESS HLDGS LTD
T39.SI
Singapore Press Holdings: Cost management delivering results
- Ad revenues continue downtrend
- Increasing newspaper prices
- Property contributions remain firm
Unabated pressure on the media topline
- Singapore Press Holdings (SPH) reported that its 2QFY16 PATMI decreased 19.6% YoY to S$63.8m mostly due to lower revenues from its media segment, weaker net income from investments and lower share of results of associates due to the absence of a S$7.4m restructuring gain booked in the corresponding quarter last year; partially offset by lower materials, production and distributions costs, staff costs, finance costs and other operating expenses.
- In terms of the topline, 2QFY16 revenues dipped marginally from S$275.4m a year ago to S$259.3m.
- Unsurprisingly, we saw continued pressure on the media segment topline which fell 6.0% to S$190.7m in the latest quarter, while property and other revenues partially offset this with 0.9% and 9.5% YoY growth to S$61.1m and S$7.5m, respectively.
- Overall, we deem this quarter’s results to be broadly within expectations.
- SPH declared an interim dividend of 7.0 S-cents, which was unchanged from last year and similarly within expectations.
Rolling out increases in newspaper cover prices
- The advertising market remained soft over the latest quarter, with total newspaper ad revenue down 8.4% YoY (display ad revenues down 7.6% and classified down 9.9%).
- In 1H16, management had focused on keeping costs low and this has yielded results.
- Newsprint costs, staff costs and other materials, production and distribution costs all fell 10.7%, 4.9% and 1.9%, respectively.
- We understand that management is rolling out increases in newspaper cover prices; this is expected to marginally boost circulation revenues which currently constitutes 14.6% of 1H16 operating revenues of S$555.5m.
- In the property segment, 1H16 net property income grew 8.2% to S$88.7m, boosted by Seletar Mall which commenced business in Nov 2014 and higher rental income from Paragon and The Clementi Mall.
- Maintain HOLD with an unchanged fair value estimate of S$3.78.
Carmen Lee CFA
OCBC Securities
|
http://www.ocbcresearch.com/
2016-04-13
OCBC Securities
SGX Stock
Analyst Report
3.78
Same
3.78
