MENU

Here Are 2 Companies That Recently Reported Weaker Numbers In Their Latest Quarterly Earnings

We’re back in the earnings season again!

As is common with every earnings season, there will be some companies posting growth, some companies posting flat numbers, and some companies experiencing declines. So, which are the companies that have recently reported weaker financials in their latest results? Let’s look at two of them:

1. Last week, M1 Ltd (SGX: B2F) released its 2017 first quarter earnings.

Despite enjoying a 1.2% increase in revenue for the quarter, M1 saw its earnings per share fall by 14.1% year-on-year. Moreover, its balance sheet had deteriorated, as its net-debt position (total debt minus cash) had increased from S$300 million a year ago to S$376 million.

As a quick background, M1 is the smallest of the three currently operational telcos in Singapore’s market. One of the biggest issues the three telcos have to contend with is the impending entry of Australian telco TPG Telecom. In late 2016, TPG Telecom won the bid to become Singapore’s fourth telco.

In an attempt to drive growth, M1 had secured new spectrum at a recent auction. Management said that the win will allow M1 to “enhance [its] network coverage, deploy innovative technologies to augment [its] network capacity, and deliver superior customer experience cost effectively through optimal use of spectrum.”

Another few initiatives M1 is pursuing is the introduction of cloud-based service offerings, and the development of Internet of Things and Smart Nation solutions.

2. Next up we have Singapore Press Holdings Limited (SGX: T39). As a publisher of many of Singapore’s major newspapers, Singapore Press Holdings likely needs no introduction.

But, the company also has other businesses, such as developing and investing in properties. As part of Singapore Press Holdings’ 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.

In mid-April, Singapore Press Holdings released its second quarter earnings for its financial year ending 31 August 2017 (FY2017). For the quarter, the REIT saw its revenue and net profit decline by 8.2% and 1.2%, respectively, when compared to the same quarter a year ago.

In a similar manner to M1, Singapore Press Holdings’ balance sheet also deteriorated. In the reporting quarter, it had S$269.5 million in cash and equivalents but debt of S$1.33 billion; a year ago, the REIT had S$288.2 million in cash and equivalents and debt of S$1.30 billion.

Singapore Press Holdings’ lower overall revenue was partly driven by double-digit year-on-year declines in its advertising revenue – its display, classified, and newspaper ad revenues fell by 19.3%, 16.6%, and 18.5%, respectively.

Alan Chan, the chief executive of Singapore Press Holdings, had a few words to share in the earnings release on the company’s future:

“With the uncertain economic outlook and the continuing disruption of the media industry, the Group will press on with our transformation strategy. We are making steady progress in positioning SPH as a forward-looking and efficient organisation which can meet the evolving demands of a new marketplace.

We continue to focus on our drive to sustain and transform the core media business through investment in growth areas and cost discipline, while also pursuing other opportunities to diversify revenue streams. On this count, we look forward to launching our two new radio stations at the start of 2018.”

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and 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 Lawrence Nga doesn’t own shares in any companies mentioned.