Alleviating core business decline may be a losing battle for SPH: analysts

Its newspaper ad revenues declined by 8.6%.

The media firm may have done every possible measure to try and revive the flickering flame of its core business, but analysts think it may be a losing battle for Singapore Press Holdings.

According to a report by OCBC, the group has been actively managing its cost base against persistent inflationary pressure which saw materials, production and distribution costs fall by 8.0% YoY to S$42.7m over the quarter, while the increase in staff costs was capped to 2.6% YoY.

“The group’s property segment pulled in a steady set of results over the quarter, as 3QFY16 revenues increased 1.6% YoY to S$60.3m on the back of higher rental and services income. Dividend uncertainties likely to foment headwinds for shares We update our valuation model for lower profit expectations and our fair value estimate dips 9.8% to S$3.41, from S$3.78 previously,” the report noted.

Additionally, OCBC adds that uncertainties remain in the firm’s future as the group continues to struggle with formidable market conditions, likely fomenting considerable headwinds for the share price.