SPH Q2 results was out.
I only want to find out 2 things.
1) Is its media business still deteriorating?
2) Is property segment able to offset the deterioration?
Here are the numbers.
Operating profits include the recurring media AND property business, property income exclude valuation gains but is before accounting for minority interest.
So, we can see the media business is still deteriorating.
Property income is stable and growing, but after accounting for minority interest, will still be a falling number, not enough to offset the fall in media business.
Display advertisement fees is still very weak, and although Singapore has some quarters of strong GDP from 2Q 2013, it does not show in the advertisement revenue generated. All segments of advertisements show weakness.
Without the one off gain from the partial disposal of 701 stake, Q2 numbers will be horrible.
Well, the only thing to look forward to is the Seletar mall which will be complete in December 2014 and start to contribute in 2015.
SPH should have no problem maintaining the dividends in the short run, but if the deterioration does not stop, even with stronger economic numbers, then either they have to go big in property development, or they need operate even more cost efficiently, or they could raise the ASP of papers. 19 mio annual savings, if you ask me, is not really significant.
The weird thing is: There is a research report saying SPH might test $4.4 in the coming weeks. Hmm... I would start shorting SPH if it does go to $4.4, hahahaha