3 Key Things to Know About Singapore Press Holdings Limited’s Latest Earnings

Last Friday, Singapore Press Holdings Limited (SGX: T39) reported its third quarter earnings for its fiscal year ending 31 August 2017 (FY2017).

The results reflected the challenging conditions that the media group is facing. The difficult situation is not new as SPH has been suffering on multiple fronts. To summarize the situation, I picked out three slides from SPH’s latest earnings presentation.

Source: SPH’s earnings presentation

SPH has three major business segments: media, property, and others.

From the slide above, we can see that SPH’s media segment is behind the company’s overall decline in revenue for the fiscal year-to-date. In the third quarter of FY2017, the media segment experienced a 15.7% decline in revenue. The lower top-line from the media segment came from a combination of an 18.7% fall in advertising sales and a 10.6% drop in circulation sales for the third quarter.

SPH’s April 2017 Orange Valley acquisition (Orange Valley is a nursing home provider) helped offset part of the revenue decline at the media segment, but it was far from enough to stem the bleeding.

Source: SPH’s earnings presentation

SPH’s decline in revenue has left its mark on the company’s profits.

For the fiscal third quarter, the media group managed to reduce costs by 6.7%, but that wasn’t enough to offset the sizable fall in revenue. The profit decline was made worse by a $37.8 million impairment charge taken in the third quarter. Together with restructuring charges suffered in the fiscal first quarter, SPH saw a 37.1% decline in profit for the first nine months of FY2017.

Source: SPH’s earnings presentation

There may be some better news in store for the company in its fiscal fourth quarter.

SPH recently sold its 701search site for US$109 million. The transaction was completed at the end of June. As a result, the media group said that it expects to record a profit of $150 million in the fourth quarter.

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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.