Is there hope for Singapore Press Holdings' media business?

Singapore Press Holdings

There is no denying the fact that the media industry in Singapore has been grappling with digital disruption, resulting in a significant decline in advertising spending that badgers the revenues of media firms.

Take for example Singapore Press Holdings: while it reported a 32.1 percent jump in its first-quarter profit, its core operations are actually crumbling.

Looking at the group's 1Q18 results, OCBC Investment Research analyst Joseph Ng said SPH's operating revenue remained lackluster, falling by seven percent to S$258.8 million, no thanks to the 13.9 percent dip in its media revenue.

In the recently concluded quarter, SPH's media business suffered a drop in advertising and circulation revenues, falling 16.7 percent and 7.3 percent, respectively.

"Disruption in the media business has been an ongoing theme, and 1Q18 was no different," Ng said.

However, while newspaper ad revenue registered decreases across all 3 sub-segments of between 12.5 percent and 17.9 percent year-on-year, Ng said this negative variance has now narrowed compared to the preceding quarters.

The analyst explained that a short-term boost for SPH's media business is the improving retail ad spend. The recent en bloc fever could also provide SPH further respite moving forward.

"However, we prefer to remain cautious and await the unfolding of further initiatives to reposition the media business," Ng stated.

Early this week, SPH CEO Ng Yat Chung said the group will roll out new products to deal with the disruption in the group's core media business.

"At the same time, we will continue to pursue other growth opportunities to diversify revenue streams," the group's chief said.

Diversification helped buoy SPH profits in the past quarter, with its property segment delivering a steady revenue growth of 1.2 percent to S$61.2m, on the back of higher rental income from its retail assets.

More so, SPH managed to record a 48.2 percent growth in its other businesses, particularly from its aged care operations.