3 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 three key slides on SPH’s Media segment shared by management during the earnings briefing. For the first two slides, head here.
3. Circulation to the rescue?
Source: SPH’s earnings presentation
To recap, SPH’s Media segment made up 74% of total revenue in the first half of the fiscal year ending 31 August 2017 (FY2017). However, when it comes to profit, the Media segment is a smaller contributor, making up just 36% of SPH’s total profit before tax.
Over the past year, profits from the Media segment have suffered a massive decline. But amidst the carnage, there are a few bright spots.
SPH said that its average daily newspaper circulation has been sustained. During the earnings call, SPH made another point:
“You may also recall that we raised our cover price for our publications last year. The increases varied by title from ten to 20-plus percent. As the increase took effect in 1st March 2016, we have had a full year of change.
The results have been positive.
There has been a marginal but positive increase in revenue despite the prevalence of free media and the ceasing of the paid TNP (The New Paper).”
The last time SPH raised prices was eight years ago. SPH said that the price increase back then also had a positive effect on its revenue. The media company commented:
“While the percentage increase sounds high, the effect to the bulk of our readers is less so. The offer also includes an all-in-one print plus digital for the same price as print, which offers much value and convenience to our readers.”
To be sure, circulation made up less than 16% of SPH’s total revenue for the first half of FY2017. Advertising still makes up over half its revenue. In the interim, SPH will have to deal with the latter’s decline and find news sources of revenue.