While there is no denying the impact of digital disruption on the group’s core media earnings which continued to decline over the latest quarter, OCBC says the management team’s approach in rationalising the business is “mostly realistic and sound”.
In FY17, SPH reported PATMI increased 32% y-o-y to $350 million mostly due to a gain of $150 million from a partial divestment of the group’s stake in the regional online classifieds business, and a fair value gain on investment properties of $57 million. This was partially offset by impairment charges of $96 million on the group’s magazine business and printing presses.
See: SPH full-year earnings up 32% to $350.1 mil on one-off gains; revenue down 8.2%
Excluding these one-time charges, FY17’s recurring earnings declined 20% y-o-y while the decline in operating revenues narrowed 8% as the core media business continued to suffer the disruption from digital media.
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The property segment, however, delivered steady results as revenues increased 1% y-o-y from higher rental income from the group’s retail assets. “We deem this set of results to be mostly within our expectations,” says OCBC.
A final dividend of 9 cents per share has been proposed, bringing total dividends in FY17 to 15 cents.
As at 2.30pm, shares in SPH are up 1 cent at $2.73 or 20 times FY18 earnings. Year to date, the stock is down 23%.
