6 Quick Things Investors Should Learn About Singapore Press Holdings Limited

Singapore Press Holdings Limited  (SGX: T39) is one of the cool companies in Singapore that shares webcasts and/or transcripts of their quarterly earnings presentations.

There may be useful and important information that investors can learn from the webcasts and transcripts. A few days back, Singapore Press Holdings – or better known as SPH – had released its earnings for its fiscal second-quarter (three months ended 29 February 2016). I had spent time listening to the webcast of the earnings release and came away with six pieces of information that may be important for investors to note.

But before I share them, here’s a quick background of SPH for context. The company may be best known as the publisher of most of the major newspapers around the island of Singapore. Beyond newspapers, the company also engages in property development and other activities such as events management. In addition, the company is the majority owner and manager of SPH REIT (SGX: SK6U), a real estate investment trust that owns retail malls in Singapore. You can learn more about SPH in here and here.

With that, here are my notes:

  1. For the first half of its fiscal year ending 31 August 2016 (FY2016), the Media segment and Property segment were the major contributors of operating revenue, making up 74.5% and 21.7% of the total pie respectively. The Others segment, which consists of activities such as exhibitions and online classifieds, made up less than 4% of overall revenue.
  2. Unfortunately, the Media segment’s revenue and profit fell by 7.5% and 15.5% year-on-year, respectively, in the first-half of FY2016. A decline in print ads was a major contributor, although SPH noted that its digital ad segment is growing.
  3. The majority of the Media segment’s sales comes from advertising and circulation. The advertisement sub-segment can further be broken down to display, classified, and magazine & others. Display revenue was the largest, contributing $173 million for the first half of FY2016.
  4. Newspaper ad revenue declined by 10.3% year-on-year in the first-half of FY2016, following FY2015’s 8.7% fall. The decrease in ad revenue appears to be picking up pace. Display revenue was down 10.4% year-on-year while circulation revenue fell by 10.1%.
  5. SPH’s newspaper cover prices were increased effective from 1 March 2016. The increase varies by title, amounting between 10% to more than 20%. For the first half of the fiscal year, SPH’s daily average newspaper circulation was flat year-on-year.
  6. SPH has a $1.2 billion investable fund which consists of equities, bonds, investment funds, and cash and deposits. The fund’s holdings include stakes in local telecommunications outfits Starhub Ltd (SGX: CC3) and M1 Ltd (SGX: B2F) among other investments. The fund has returned around 4% annually since its inception in 2001.

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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.