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Singapore Press Holdings Limited’s Latest Earnings

Singapore Press Holdings Limited (SGX: T39) reported its fiscal first-quarter earnings yesterday evening for the year ending 31 August 2016 (FY2016). The reporting period was for 1 September 2015 to 30 November 2015.

SPH may be best known as a publisher of most of the major newspapers here in Singapore. But there’s more to the company beyond that; it also engages in property development and other activities like events management. In addition, the firm’s also the majority owner and manager of SPH REIT  (SGX: SK6U), a real estate investment trust which owns retail malls.

You can learn more about SPH here and here. You can also catch up with the firm’s fiscal fourth-quarter earnings here.

Financial highlights

The following’s a quick rundown on the latest financial figures from SPH:

  1. For the fiscal first-quarter, revenue for SPH fell by 3.5% year-on-year to come in at $296.2 million.
  2. However, profit attributable to shareholders rose by 17.3% to $81.3 million compared to a year ago. The profit increase came from higher net income from investments and lower losses from associates and joint ventures. In contrast, operating profit was down by 3.3% year-on-year to $99 million.
  3. Earnings per share (EPS) rose 25% from 4 cents in the first-quarter of FY2015 to 5 cents in the reporting quarter.
  4. Cash flow from operations came in at $106.4 million for the reporting quarter with capital expenditures clocking in at $2.6 million. This gives SPH a positive free cash flow of $103.8 million, which represents a decline from the free cash flow of $120.3 million recorded in the same period last year.
  5. As of 30 November 2015, SPH had $414.6 million in cash and equivalents and borrowings of $1.28 billion. This is an improvement from the last quarter when it had $292 million in cash and equivalents and borrowings of $1.28 billion. SPH also had $611.8 million in long-term investments and $418.7 million in short-term investments as of 30 November 2015.

In a similar manner to the last quarter, SPH saw its revenue dip on a year-on-year basis. The media company had recorded fair value losses in the first-quarter of FY2015 for its investment income, which made for an easier comparison for the reporting quarter.

Operational highlights

SPH’s overall revenue for the quarter fell by 3.5% year-on-year mainly due to lower revenue from its Media segment. The fall was tempered by a strong 16% year-on-year rise in the Property segment’s top-line, which was boosted by contributions from Seletar Mall. The mall had opened its doors only on 28 November 2014.

While growth in other segments are welcome, the Media segment still makes up around three quarters of SPH’s total revenue. The Media segment’s revenue fell by 8.7% from $244.4 million in the first-quarter of FY2015 to $223 million in the reporting quarter. Lower advertising and circulation revenue had led to the fall.

It’s worth noting too that SPH’s Newspaper ad revenue (which falls under the Media segment) had declined by 11.9% year-on-year in total in the reporting quarter. This follows a multi-year trend of consecutive annual declines in Newspaper ad revenue.

Alan Chan, the Chief Executive Officer (CEO) of SPH, had provided the following statement on the outlook of the company in the latest earnings release:

Despite the sluggish macroeconomic environment and structural challenges confronting the media industry, the Group managed to deliver another set of satisfactory results. This is a testament to our efforts in diversifying revenue streams and managing costs effectively.

That said, the operating environment for FY2016 is expected to remain difficult, in view of the economic outlook and an increasingly fragmented media landscape. To address the challenges ahead, the Group will redouble its efforts to sustain the Media business, including adjacent businesses, and continue to evaluate and pursue growth opportunities.

Foolish summary

At its closing price yesterday of $3.67, SPH traded at a trailing price-to-earnings ratio of 18 and has a dividend yield of 5.4% thanks to its annual dividend of S$0.20 per share in FY2015.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.