SPH can't get its hopes up for a bullish growth

Revenue growth will just hit 0%-2%.

According to DBS, 1Q13 is slower than expected. 1Q13 net profit dropped by 6.6% y-o-y to S$91.1m, on the back of a 3.1% drop in revenue to S$322.1m and higher operating expenses to S$210.5m (+1.8% y-o-y).

Ad revenues dip on uncertain economic outlook. Revenue from Newspaper and Magazine businesses dipped to S$263.5m (-2.3% y-o-y) on weaker advertisement revenue (S$204.8m, -2%) and circulation revenue (S$49m, -2.6%). Rental income, however, increased marginally to S$49m (+2.9%) on the back of higher rentals from Paragon.

Staff costs inched up 0.8% higher on salary increments, partially offset by lower bonus provisions, while newsprint costs were S$2m lower as charge-out rates fell to US$644/mt from US$691/mt a year ago. Other operating expenses also increased by 15.4% to S$32.9m on increases in promotional activities and online businesses.

Here's more from DBS:

Earnings growth to remain muted. Along with the muted domestic growth outlook, we expect SPH growth to remain lackluster. DBS economist expects GDP to grow by 1.6% and 3.2% for 2012 and 2013, respectively.

With this, we expect print revenues to be weighed down by the muted economic outlook and expect 0%/2% ad revenue growth in FY13F/14F. Fortunately, growth should be supported by stable contribution from its property rental income.

Property rental to grow in importance. We continue to see SPH growing rental income as a key buffer for the group’s softening advertising and circulation revenue. Property rental now accounts for 15% and 21.7% of the group’s revenue and PBT in 1Q, respectively, up from 14% and 19.7% a year ago.

This should be further increased with the expected completion of Seletar Mall at the end of 2014.

If you've been wondering whether SBR could work for your company — yes, probably.

A lot of the companies we partner with started as readers. They'd been following our coverage for a while, saw their own customers and competitors in it, and eventually asked the obvious question: could we do something with you? The answer is usually yes. The shape of it depends on what you're trying to do.

The options are broader than most people assume — thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. Some partners use one channel; most use a mix. We figure out the right combination by starting with your brief, not with our rate card.

So if the question has been on your mind, here's the easy way to ask it.

We'll tell you honestly whether we can help, and how. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia