Singapore Press Holdings profits dropped 44.1% to $26.2m in Q3

Lower print advertisement and circulation revenue dragged down the company’s performance.

Singapore Press Holdings’ (SPH) profits crashed 44.1% YoY to $26.2m in Q3 from $46.91m in 2018, an announcement revealed. Its revenue also eased 2.1% YoY from $254.9m to $249.6m.

Its dismal performance was blamed on the 16.7% slip in print advertisement revenue of $16.3m, lower circulation revenue of $2.8m, and the absence of contribution from Shareinvestor.com holdings of $2.2m following the divestment in November 2018.

Also read: Singapore Press Holdings profits sank 25.7% to $29.69m in Q2

On the other hand, the digital side of the media business remained on the upswing with newspaper digital ad revenue rising 11% compared with a year ago. Daily average newspaper digital sales increased 12.8%.

SPH also noted that the declines were partially cushioned by rental revenue of $14.3m from its purpose-built student accommodation (PBSA) portfolio and $4.2m from SPH REIT’s retail asset, Figtree Grove Shopping Centre in Australia.

The student accommodation portfolio added 1,243 beds in the fast-growing UK student cities of Southampton, Sheffield and Leeds with a $228.09m (GBP133.7m) acquisition in April 2019. This followed an acquisition of 264 beds in Glasgow in March 2019, marking the first asset in Scotland for the portfolio. With these latest acquisitions, the portfolio comprises 5,059 beds across 10 cities in the UK with assets under management of more than $600m.

Also read: SPH's student beds sell out as Chinese flock to UK universities

Its overall property segment saw revenue growing 21.4% to $220.7m boosted by additions to the UK student accommodation portfolio. Profits rose 14.8% to $132.8m million. The overall property segment’s contribution to the group’s profits has now grown to about 80%.

Meanwhile in the aged care segment, the firm’s recent increase in build-own-lease (BOL) nursing home bed capacity coming on stream has impacted the original business projections of Orange Valley.

“As such, the group has decided to take an impairment amounting to $21.5m in the quarter,” the SPH also revealed. Notwithstanding the impairment, the occupancy rate of Orange Valley and the average bill size continued to grow steadily.

In June 2019, SPH issued $150m of perpetual securities with a coupon of 4.5%, of which the proceeds will be used for additional working capital, refinancing of borrowings as well as for acquisitions and investments. The issue was well-received by investors, with a subscription rate of more than 5 times.

During the same month, it was announced that SPH will be a cornerstone investor in the initial public offering (IPO) of KBS Prime US REIT, committing $74.65m (US$55m) for a 6.8% stake. SPH also plans to take a 20% stake in the REIT manager.