Singapore Press Holdings Limited’s Latest Earnings: Revenue Declines, Again

Last Friday, Singapore Press Holdings Limited (SGX: T39) reported its third quarter earnings for its fiscal year ending 31 August 2017 (FY2017). The reporting period was for 1 March 2017 to 31 May 2017.

As a quick background, SPH may be best known as a publisher of most of the major newspapers here in Singapore. But there’s more to the company: It also engages in property development and other activities such as events management and the running of online advertising platforms. As part of the company’s property-related business, it is the majority owner and manager of SPH REIT (SGX: SK6U), a retail real estate investment trust.

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

Financial highlights

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

1. For the fiscal third quarter, revenue for SPH fell by 10.8% year-on-year to $260.0 million.

2. Profit attributable to shareholders sank by 45.2% to $28.9 million. The sharp decrease was due in part to an impairment charge that’s related to its magazine business.

3. Earnings per share (EPS) fell from $0.03 a year ago to $0.02 in the reporting quarter.

4. Cash flow from operations was a negative $35.7 million for the reporting quarter while capital expenditure was $2.9 million. This gave SPH a negative free cash flow of $38.6 million for the reporting quarter. This is a slight improvement from the negative $45.2 million in free cash flow recorded a year ago.

5. As of 31 May 2017, SPH had $233.8 million in cash and equivalents and borrowings of almost $1.48 billion. A year ago, the group had $278.5 million in cash and equivalents and borrowings of almost $1.3 billion.

6. SPH also had $574.6 million in long-term investments and $361.9 million in short term investments, as of the end of May 2017.

In all, SPH continued to lose revenue and profits. The company’s revenue declined by 6% in FY2017’s first quarter and followed with an 8.2% fall in the second quarter. The reporting quarter saw an even larger revenue decline of 10.8% year-on-year.

Operational highlights and future outlook

SPH’s overall revenue fell due to a 15% year-on-year decline in revenue from the media segment to $182.5 million. Lower advertising and circulation revenue led to lower revenue for the media segment. The fall was offset by increases in revenue from the property segment, and the others segment. The latter was lifted by the maiden contribution from SPH’s newly acquired healthcare business.

SPH’s chief executive, Alan Chan, shared the company’s outlook in the earnings release:

“The Group will forge ahead with its drive to transform the core Media business. We have pursued other growth opportunities to diversify revenue streams. To date, we have made steady progress with the recent acquisition of Orange Valley Healthcare and our joint venture winning the tender to develop a mixed commercial and residential site at Bidadari.”

SPH’s share price closed at $3.11 last Friday. The company traded at a price-to-earnings (PE) ratio of about 24 times and has a dividend yield of 5.5%.

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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.