SPH shares dip below $1 after company posts first net loss
SINGAPORE (THE BUSINESS TIMES) - Shares of Singapore Press Holdings (SPH) sank on Wednesday (Oct 14) as the board slashed dividends after the media and property group fell into the red for the first time.
The counter shed 5.2 per cent or 5.5 cents to 99.5 cents as at 9.04am, the first time it dipped below $1.
It regained some momentum later in the morning, trading at $1.01 as at 9.41am, down 3.8 per cent or four cents from Tuesday's close.
About 17 million shares had changed hands by then, making it the third most actively traded by volume.
The board on Tuesday declared a final dividend of one cent per share, versus last year's 5.5 cents, which included a special dividend of one cent. Together with the interim dividend of 1.5 cents, the total dividend payout for financial year 2020 will be 2.5 cents.
SPH, which publishes The Straits Times and The Business Times, posted a net loss of $83.7 million for the full year ended Aug 31 as it took a hit from non-cash fair-value losses of $232 million - mostly on its malls and purpose-built student accommodation assets. This reversed its net profit of $213.2 million a year ago.
Its media business continued to be hurt by declining advertising revenue. For the full year, revenue for the media segment shrank 22.8 per cent to $445.1 million due to a fall in newspaper print advertisement revenue. Loss before taxation for the segment was $11.4 million, compared with a profit of $54.7 million for the 2019 financialyear, after taking into account retrenchment costs of $16.6 million.
The property segment posted a better showing, rising 10.3 per cent to $327.2 million. But loss before taxation for this segment was $75.8 million, compared with a profit of $263 million in financialyear 2019, due to the fair-value losses.
DBS analysts Alfie Yeo and Andy Sim on Wednesday maintained their "hold" rating on SPH, lowering their target price to $1.09 from the previous $1.26 as they expect weakness to persist in the media segment for financialyear 2021, dragging overall earnings.
星展分析师Alfie Yeo和Andy Sim周三维持对SPH的“持有”评级，将目标价从之前的1.26美元下调至1.09美元，因他们预计2021财年媒体板块疲软将持续，拖累整体获利.。
The group's core revenue fell within expectations but core operating profit fell short because of higher-than-expected operating costs, Mr Yeo and Mr Sim wrote in a report.
"We expect media to continue to be a drag in the immediate term, given the weak advertising expenditure outlook, with property segment driving earnings growth and margins," they wrote.
Against this backdrop, the analysts have lowered their forecasts for earnings in FY21 to FY22 by 7 per cent to 18 per cent after factoring in lower operating margins. However, they remain bullish on the group's property business.
"Nonetheless, we see property driving earnings growth in the longer term, contributing to better margins for the group from FY22," the analysts noted.