SPH announced that 2QFY17 PATMI dipped marginally by 1.2% YoY to S$53.5m while group recurring earnings on an operating level declined 22.2% YoY to S$53.0m, which was partially offset by a S$9.5m bump in investment income from divestment gains. In terms of the topline, group operating revenue fell 8.2% YoY to S$238.0m mostly due to weaker contributions from the media business which fell 11.9% YoY.

Ad revenues also fell 16.8% YoY as management cited continued headwinds in its operating environments due to the slowing economy and the unabated disruption of the media industry. That said, the group’s property segment pulled in stable numbers with revenues inching up 1.3% YoY as rental income rose.

We deem this set of results to be mostly within our expectations. Maintain SELL on the stock on valuation grounds with an unchanged fair value estimate of S$3.41.

Source: OCBC Research - 13 Apr 2017