Singapore Press Holdings Limited’s Latest Earnings: The Slow Bleed Continues

Singapore Press Holdings Limited (SGX: T39) reported its second-quarter earnings yesterday evening for its fiscal year ending 31 August 2016 (fiscal 2016). The reporting period was for the three months ended 29 February 2016.

The company, known as SPH for short, could be best known as a publisher of most of the newspapers here in Singapore. But there’s more to the company. It is also in the real estate business and other activities like events management. As part of the firm’s real estate activities, it is the majority owner and manager of SPH REIT  (SGX: SK6U), a real estate investment trust which owns retail malls in Singapore.

You can learn more about SPH in here and here. You can also catch up with the results from the company’s last quarter in here.

Financial highlights

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

  1. For the reporting quarter, revenue for SPH fell by 4.1% year-on-year to end at $264.2 million.
  2. Profit attributable to shareholders fell by 22.3% to $54.1 million. The profit decrease came from sharply lower net income from investments and losses from associates and joint ventures. In contrast, operating profit had actually inched up 0.2% to $68 million from the same period in the previous year.
  3. The company’s earnings per share (EPS) fell 33% from $0.04 in the second-quarter of fiscal 2015 to $0.03 in the reporting quarter.
  4. Cash flow from operations came in at a negative $166.6 million for the reporting quarter. Meanwhile, capital expenditures clocked in at $2.1 million. This gives SPH a negative free cash flow of $168.7 million. This is a slight improvement from the negative $178.3 million in free cash flow recorded a year ago (a negative $175.7 million in cash flow from operations and $2.6 million in capex).
  5. As of 29 February 2016, SPH had $288.2 million in cash and equivalents and borrowings of $1.3 billion. This is a slight decrease from a year ago where it had $867 million in cash and equivalents and borrowings of $1.9 billion. SPH also ended the reporting quarter with $605.5 million in long-term investments and $394.5 million in short-term investments; the selfsame figures a year ago were $617.3 million and $474.6 million, respectively.

In fiscal 2015, SPH saw its revenue dip by 3.1%. In the last quarter (the first-quarter of fiscal 2016), the company’s revenue decline continued with a 3.5% year-on-year fall. It’s the same story in the reporting quarter. As mentioned, revenue slipped by 4.1% year-on-year.

The better news is that the company’s operating profit had held up better than its top-line. Over the longer term, investors may want to observe if SPH can turn the ship around and bring in higher revenues.

SPH’s board of directors had declared an interim dividend of $0.07 per share for the reporting quarter, unchanged from the year before.

Operational highlights

SPH’s revenue had declined in the reporting quarter mainly due to lower revenues from the Media business segment. The segment, which accounted for nearly three quarters of SPH’s total sales, saw revenue fall 6% year–on-year to $190.7 million. The fall in revenue was from lower advertising and circulation revenue.

SPH’s newspaper ad revenue has fallen for four straight years from fiscal 2012 to fiscal 2015. In the first-half of 2016, the company’s total newspaper ad revenue fell by a hefty 10.3% year-on-year.

Elsewhere, there was a minor sales increase from SPH’s Property and Others segments.

Alan Chan, the chief executive of SPH, had provided a brief outlook for the company’s future in the earnings release:

“The quarter under review was marked by a very difficult operating environment. Despite this, the Group continued to turn in a respectable performance.

The road ahead is expected to remain challenging, given the uncertain economic outlook and fast evolving media landscape. Amid the challenging times, the Group will continue its efforts to transform the Media business and pursue growth opportunities.”

Foolish summary

As of its closing price yesterday of $3.99, SPH traded at 21 times trailing earnings.

To keep up to date on the latest financial and stock market news, sign up now for a FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore. It will teach you how you can grow your wealth in the years ahead.

Also, like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.

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.