SPH's total ads down 10% in 4QFY17

Print revenue is expected to stay flat at best.

Based on UOB Kay Hian's page count for Singapore Press Holdings (SPH), total ads for the Straits Times fell 10.3% yoy in the continued depressed advertising environment. Despite this, analysts said the decline represented a slowdown from 3QFY17, given the improvement of 3.4ppt.

"On a qoq basis, total ads were almost flat, possibly hinting that advertising demand might have bottomed out. Ad counts for the various segments remained down 7-21% on a yoy basis, notably for recruitment (- 21% ) and classifieds (-18%). Display saw a slight qoq uptick of 2%, which is likely due to the pick-up in property advertising."

Here's more from UOB Kay Hian:

The slowdown in page count decline could be perceived as an indicator of a reversal in print revenue decline. However, a historical analysis (see chart above) shows that this may not necessarily be the case. Underlying structural issues persist, as noted by the widening divergence (chart above) in print revenue and GDP, where a strong correlation used to exist.

 In the best-case scenario, should the rate of page count decline continue to slow, we expect it to arrest print revenue and keep it flat. Otherwise, our base case assumption still calls for an additional print revenue decline of 7.5%/5.0% in FY18/19 respectively.