Saturday, July 16, 2016

SPH sees 3Q earnings fall by nearly half to $52.7 mil on impairment charge

Property and media group Singapore Press Holdings saw third quarter earnings tumble 46.4% from a year ago.

Net profit attributable to shareholders for the three months to May came in at $52.7 million, impacted by impairment charges of $28.4 million that was related to the magazine business whose performance was affected by unfavourable market conditions.

At the operating level, group recurring earnings of $60.8 million was $44.4 million or 42.2% lower on year. Excluding the impairment charges, group recurring earnings would have fallen by $17.1 million or 16.1%.

Group operating revenue slid $15.2 million or 5.0% y to $291.6 million, “as structural challenges confronting the media industry and the sluggish economic environment continued to weigh on the performance of the group’s core media business”, says SPH.

For the quarter, the media business saw a $15.7 million or 9.2% dip in advertisement revenue. Circulation revenue was maintained y-o-y, aided by the positive impact of the newspaper cover price increases implemented on March 1.

The property segment turned in a “resilient” performance despite the subdued retail environment, with revenue up $1.0 million or 1.6% against a year ago. This was on the back of higher rental and services revenue from the group’s retail assets.

Investment income of $18.7 million fell $5.3 million or 22.2% from last year, attributable to lower dividend income and smaller gains from sale of investments.

On its outlook, Alan Chan, CEO of SPH, says: “Given the challenging market conditions, the Group has embarked on a comprehensive review of our core Media business. The aim is to better address the evolving needs of our advertising customers and deliver effective, integrated solutions across our various media platforms. In addition, we will critically examine our product portfolio and also identify areas where we can further enhance our operational efficiency.”

SPH shares closed 1% higher at $4.07.

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