2 Must-See Slides from Singapore Press Holdings Limited’s Latest Earnings Report
Singapore Press Holdings Limited (SGX: T39) reported its fiscal second-quarter earnings in April.
The earnings briefing that followed covered a number of topics, but the elephant in the room was the decline in SPH’s Media business. For context, SPH has three business segments: Media, Property and Others. The Media segment is far and away the largest contributor to SPH’s revenue.
With this in mind, let’s zoom into two key quotes on SPH’s Media segment shared by management during the earnings briefing.
A sunset industry?
Source: SPH’s earnings presentation
SPH’s Media segment made up 74% of total revenue in the first half of its fiscal year ending 31 August 2017. However, when it comes to profit, the Media segment is a smaller contributor, making up just 36% of SPH’s total profit before tax.
The Media segment’s profit before tax suffered in large part due to a one-off charge taken for the restructuring of the segment and an impairment charge for an associate. SPH added this comment during the earnings briefing:
“To assess the true underlying performance of Media, please remember to add back the $16 million one-off charge taken in quarter one.”
But if we add back the $16 million as SPH suggested, the fall in profit before tax would be around 35%. That is still a sizable drop.
How now, brown cow?
Source: SPH’s earnings presentation
The decline in SPH’s advertising revenue is a culprit behind the fall in revenue. The slide above shows an ongoing trend where SPH’s ad revenue has declined over the past five quarters. SPH said:
“We have done some internal studies of this decline, particularly for Q2 [the second fiscal quarter], and note that the decline is across the board for all industry sectors.”
At the moment, there is little respite for SPH as its media segment continues to falter over time.
