A Deeper Look at Singapore Press Holdings Limited’s Latest Earnings

Singapore Press Holdings Limited (SGX: T39) is Asia’s leading media organisation with three business segments – Media, Property and Others. It also has a 26.84% stake in newly-listed education company, MindChamps PreSchool Ltd (SGX: CNE).

Last Friday, the media giant announced its financial results for the first quarter ended 30 November 2017. Here are 10 things investors should know from the earnings announcement:

1. Revenue for the quarter slumped 7% year-on-year to S$258.8 million, mainly due to a decline in sales at the Media segment.

2. Disruption to the industry hampered the Media segment’s revenue as it fell 13.9% year-on-year to S$173.9 million. Advertisement revenue came down 16.7% while circulation revenue sank 7.3% as compared to last year.

3. Revenue from the Property segment grew 1.2% to S$61.2 million due to higher rental income from its retail assets. Meanwhile, “Others” revenue surged 48.2% to S$23.6 million on the back of contributions from the newly-acquired Orange Valley business, Singapore’s largest private nursing home operator.

4. Dilution of interest on an associate’s initial public offering (IPO) listing helped to increase other operating income’s figure from S$3.6 million last year to S$8.5 million in the latest quarter.

5. Staff costs fell 4.9% year-on-year to S$85.8 million.

6. Net income for investments in the 2018 first quarter was S$12.4 million due to gains on divestment, as compared to the previous year’s loss of S$1.8 million.

7. Due to the above, net profit grew 32.1% year-on-year to S$60.4 million.

8. As at 30 November 2017, Singapore Press Holdings had cash and cash equivalents of S$397.7 million, and S$1.63 billion in total borrowings. This translates to a net debt position of S$1.23 billion, a deterioration from the S$1.19 billion in net debt that it had on 31 August 2017.

9. For the latest quarter, the firm generated an operating cash flow of S$62.3 million. With capital expenditure coming in at S$8.7 million, it raked in a free cash flow of S$53.6 million. A year ago, it had a higher free cash flow of S$76.2 million.

10. Looking ahead, Ng Yat Chung, chief executive of the company, said:

“We will roll out new products to deal with the disruption in the core media business. At the same time, we will continue to pursue other growth opportunities to diversify revenue streams.”

Singapore Press Holdings Limited’s shares are selling at S$2.70 now, up 2.7% as compared to Friday’s close.

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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 Sudhan P doesn’t own shares in any companies mentioned.