Singapore Press Holding's page count falls by 12.7%

Analysts blame its display segment, which accounted for two-thirds of the total decline.

The page count of Singapore Press Holdings’ (SPH) newspapers slipped 12.7% YoY, whilst the three segments (recruit, classifieds, display) reported a 19%, 16% and 11% YoY decline in page counts respectively, UOB Kay Hian revealed in an analysis of The Straits Times newspapers.

According to a report, the decline was driven primarily by the display segment, which accounted for two-thirds of the total decline on an absolute basis. The quarter’s decline represented a moderation from Q1 2018’s -13.6% YoY.

UOB Kay Hian analyst Foo Zhi Wei noted that larger-than-expected page count decline prompts a downward revision of print revenue assumptions. “A 12-13% YoY decline in quarterly page counts historically translated to 16-22% YoY declines in quarterly print revenue. Even with the likelihood of higher advertising in H2 2018 from property launches, we reckon this will only contribute to higher advertising revenue for Q4 2018 only, with the rest manifesting in H1 2019.”

“As such, our current 2018 estimate for a 12% decline in print revenue might have to be revised downwards by at least 2 ppt. We look to Q2 2018 print revenue falling below the $100m level as an affirmation of this,” she added.

Wei also noted that a re-rating of SPH’s share price like its US-listed peers appears unlikely. “The recovery at its peers, such as The New York Times (NYT US), has been driven by a fundamental recovery in both circulation and advertising revenue. Since Q1 2017, NYT has seen an average quarterly growth of 57% in digital subscriptions, which has resulted in overall circulation revenue rising 11-19%. This has arrested the 1-9% decline in advertising revenue, driving overall revenue growth.”

“The same cannot be said for SPH,” she said, “which continues to see flat circulation revenue in spite of increased digital subscribers amid a backdrop of a continued decline in advertising revenue.”

SPH is still looking for a stronger solution to its media disruption, to which management stated that it plans to roll out new products. For the first quarter of 2018, Singapore Press Holdings' (SPH) revenue for its media segment continued to fall 13.9% YoY, led by a decline in display, classifieds, magazines and circulation.