SPH reported a 7.0% YoY drop in operating profit for 1QFY18 to S$258.8m, due primarily to continued weakness in the media segment. In particular, advertisement and circulation revenue dropped 16.7% and 7.3% YoY, respectively.

The group’s property segment continued to show steady results, with revenue rising 1.2% YoY to S$61.2m on the back of higher rental income from the group’s retail assets. The group’s other businesses saw revenue growing 48.2% YoY to S$23.6m with contributions from the aged care business.

A gain of S$5.9m was registered from the dilution of interest on an associate’s IPO listing. PATMI rose 32.1% YoY to S$60.4m, boosted also by investment income of S$12.4m, comprising mainly divestment gains.

We maintain our HOLD rating, but put our fair value estimate of S$2.93 under review.

Source: OCBC Research - 15 Jan 2018