Monday, 19 October 2015

SPH

OCBC on 14 Sep 2015

SPH reported that its FY15 PATMI fell 20.4% to $S321.7m mostly due to lower fair value gains on investment properties and the absence of a S$52.9m divestment gain from the partial sale of 701Search to Telenor last year, which were partially offset by smaller losses from the group's share of results of associates/JVs in the current fiscal year. After squaring off one-time items, we judge these results to be marginally below expectations as FY15 operating profit comprises 88.3% of our full year forecast, with a steeper-than-anticipated dip in the media numbers being the key driver for the miss. We update our valuation model for softer assumptions for the media business and our fair value estimate dips to S$3.78 from S$3.85 previously. Maintain HOLD. A final dividend of 13 S-cents was recommended – 1 S-cent lower than last year’s.

FY15 earnings hit by lower one-time gains
Singapore Press Holdings (SPH) reported that its FY15 PATMI fell 20.4% to $S321.7m mostly due to lower fair value gains on investment properties and the absence of a S$52.9m divestment gain from the partial sale of 701Search to Telenor last year, which were partially offset by smaller losses from the group's share of results of associates/JVs in the current fiscal year. After squaring off one-time items, we judge these results to be marginally below expectations as FY15 operating profit comprises 88.3% of our full year forecast, with a steeper-than-anticipated dip in the media numbers being the key driver for the miss. In terms of the topline, FY15 revenues decreased 3.1% to S$1,177.1m due to lower contributions from the media business which dipped 6.3% (S$60.9m) to S$902.5m. This was partially offset by increased property income which increased 12.6% (S$25.8m). Also, due to considerable cost-side discipline, FY15 operating profit increased marginally by 1.3% (S$4.5m). A final dividend of 13 S-cents was recommended – 1 S-cent lower than last year’s.

Unabated pressure on advertising revenues
The advertising numbers continue to look uninspiring in 4QFY15, with total newspaper ad revenues falling 8.4% YoY. (Display and classifieds both fell 7.1% and 11.0%, respectively.) We understand from the group that they have been focused on managing the cost base and as a result, key cost-side items, including material and production costs, staff costs and other operating expenses all showed credible YoY declines. In particular, the cost of newsprint fell 16.1% while other materials, production and distribution costs fell 8.9%. From the real estate segment, FY15 net property income increased 17.3% with a maiden contribution from Seletar Mall; both the Paragon and The Clementi Mall also recorded higher rental income. We update our valuation model for softer assumptions for the media business and our fair value estimate dips to S$3.78 from S$3.85 previously. Maintain HOLD.

No comments:

Post a comment