Escalating headwinds hound SPH's core media business despite profit uptick

Ad revenue will continue to decline.

Singapore Press Holdings' core media business is still under threat from escalating industry headwinds despite a surprise profit uptick in its third-quarter results.

CIMB analyst Jessalyn Chen said that SPH's net profit was propped up by investment gains, which was timed along with the redemption of its $600m
medium-term notes during the quarter.

The group enjoyed a gain on sale of investments amounting to $44.9m, as well as lower share of losses from associates relating to the regional online classifieds business.

"We continue to see headwinds in the core media segment, which contributed 62% of PBT in 9MFY15. We expect the competition from digital media to further drive down newspaper and magazine circulation, while the environment for newspaper advertisements has yet to take a positive turn," she said.

"Meanwhile, contributions from SPH’s investments in new media are still not meaningful enough to offset the loss in earnings from the traditional media business," Chen added.