SPH reported FY14 PATMI of S$404.3m, down 6.2%, mostly due to a decline in operating profit, a larger net loss from associates/JV, and a lower fair value gain from investment properties, partially offset by gains from the sale of 701Search and higher investment income. Overall, we judge FY14 results to be broadly within expectations. Conditions for the print ad segments remain difficult, with FY14 display and classified revenues falling 7.1% and 8.0%, respectively. We understand the group’s new Seletar Mall is on target to open by Nov-14, with occupancy rates around 90% and average rentals around S$11 psf pm. Management highlights that The Seletar Mall is located in a less established retail area, compared to The Clementi Mall, and stabilization of the new asset before it is ready for capital recycling could take between 4-6 years. SPH also declared a final dividend of 14 S-cents. Maintain HOLD on SPH with an unchanged fair value estimate of S$4.13.
Signing off on a muted year
SPH reported FY14 PATMI of S$404.3m, down 6.2%, mostly due to a 5.5% decline in operating profit to S$349.0m, a larger net loss from associates/JV, and a lower fair value gain from investment properties, partially offset by gains from the sale of 701Search and higher investment income. Overall, we judge FY14 results to be broadly within expectations. Management also declared a final dividend of 14 S-cents, comprising a normal dividend of 8 S-cents and a special dividend of 6 S-cents. FY14 dividends cumulates to 21 S-cents (payout ratio 107.8%), which is marginally lower than the 22 S-cents paid last year (excluding special dividend for SPH REIT).
Ad conditions remain difficult
FY14 revenues dipped 2.0% to S$1,215.2m as core newspaper and magazine revenues decreased 6.0% to S$931.7m. Conditions for the print ad segments remain difficult, with FY14 display and classified revenues falling 7.1% and 8.0%, respectively. Given persistent headwinds in the Singapore housing space and a continued structural shift in terms of readers moving onto new media channels, we expect ad topline pressure to continue into 1H15. In 4QFY14, newsprint prices inched down to S$598/mt versus S$607/mt in 3QFY14, while YTD staff costs increased 7.1% YoY to S$374.5m.
Seletar Mall on target for Nov 14 opening
We saw stable performance from the group’s property segment, with FY14 revenues inching up 3.5% to S$205.0m as higher rental income was derived from both retail malls. We understand the group’s new Seletar Mall is on target to open by Nov-14, with occupancy rates around 90% and rentals around S$11 psf pm (on an average basis including anchor tenants). Management highlights that The Seletar Mall is located in a less established retail area, compared to The Clementi Mall, and stabilization of the new asset before it is ready for capital recycling could take between 4-6 years. Maintain HOLD on SPH with an unchanged fair value estimate of S$4.13.
SPH reported FY14 PATMI of S$404.3m, down 6.2%, mostly due to a 5.5% decline in operating profit to S$349.0m, a larger net loss from associates/JV, and a lower fair value gain from investment properties, partially offset by gains from the sale of 701Search and higher investment income. Overall, we judge FY14 results to be broadly within expectations. Management also declared a final dividend of 14 S-cents, comprising a normal dividend of 8 S-cents and a special dividend of 6 S-cents. FY14 dividends cumulates to 21 S-cents (payout ratio 107.8%), which is marginally lower than the 22 S-cents paid last year (excluding special dividend for SPH REIT).
Ad conditions remain difficult
FY14 revenues dipped 2.0% to S$1,215.2m as core newspaper and magazine revenues decreased 6.0% to S$931.7m. Conditions for the print ad segments remain difficult, with FY14 display and classified revenues falling 7.1% and 8.0%, respectively. Given persistent headwinds in the Singapore housing space and a continued structural shift in terms of readers moving onto new media channels, we expect ad topline pressure to continue into 1H15. In 4QFY14, newsprint prices inched down to S$598/mt versus S$607/mt in 3QFY14, while YTD staff costs increased 7.1% YoY to S$374.5m.
Seletar Mall on target for Nov 14 opening
We saw stable performance from the group’s property segment, with FY14 revenues inching up 3.5% to S$205.0m as higher rental income was derived from both retail malls. We understand the group’s new Seletar Mall is on target to open by Nov-14, with occupancy rates around 90% and rentals around S$11 psf pm (on an average basis including anchor tenants). Management highlights that The Seletar Mall is located in a less established retail area, compared to The Clementi Mall, and stabilization of the new asset before it is ready for capital recycling could take between 4-6 years. Maintain HOLD on SPH with an unchanged fair value estimate of S$4.13.
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