SPH media segment hit by low print ad revenue in Q1; accommodation, aged care businesses stable

SINGAPORE Press Holdings (SPH) on Monday announced that its media business continues to suffer from lower newspaper print advertisement revenue as a result of Covid-19 disruptions for the first quarter to November. Its purpose-built student accommodation (PBSA) and aged care segments, however, remain resilient.

The media and property group, which publishes The Business Times, said in a Q1 business update that print advertisement revenue declined 36 per cent from the year-ago period. The 45.6 per cent year-on-year growth in digital circulation revenue mitigated the 8.1 per cent decline in digital advertisement revenue.

Still, print advertising remains an important channel for a core group of advertisers to engage their audience, said SPH. The group will therefore continue to "provide innovative solutions" to meet the needs of its advertisers.

Its overall year-to-date circulation was up 1.8 per cent from a year ago, with digital circulation growing 26.5 per cent, largely due to the huge boost from 31,000 subscriptions for news tablets across all the major newspaper titles.

On the PBSA front, SPH said that it has achieved 88 per cent of target revenue for the academic year 20/21 as at Jan 8, 2021. This comes as higher education courses commenced in January. Bookings have also began for the academic year 21/22 with 17 per cent of target revenue achieved as at Jan 8, 2021.

It is also tapping its network of over 28 agents globally to reach out to international students in key markets such as China, India and Cyprus.

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In addition, its internal development team has delivered the Student Castle PBSA in Oxford and Brighton successfully with 515 and 206 beds respectively.

SPH has also taken over the management of five PBSA assets in the first quarter ended Nov 30, 2020, bringing the total assets managed in-house to 13 of the 28.

The remaining assets will be taken over progressively this year and is expected to be completed by Oct 1, 2021. Upon completion, all bookings will be managed under the group's property management system.

The group also said it will continue to ramp up efforts to protect residents from Covid-19 through virus safety measures such as increasing cleaning of all facilities and furniture.

The group's aged care business in Singapore and Japan has seen stable performance. Overall bed occupancy rate (BOR) at Orange Valley assets stood at 81 per cent as at November 2020. Its assets in Japan has an underlying portfolio occupancy in the high 90s, and the lessees of all five assets continued to pay rent on time, said SPH.

SPH added that it will continue to review a strong pipeline of acquisition targets in a prudent and disciplined approach to develop aged care as an emerging segment post-pandemic.

As at Nov 30, 2020, SPH's weighted average debt to maturity stood at 3.5 years, with a cash balance of S$898 million.

SPH is currently refinancing Seletar Mall's S$300 million term loan through an extension of the existing loan. The loan extension is targeted to commence on Feb 11 for a tenure of three years. This will bring the weighted average debt to maturity up from 3.5 years to 3.8 years.

Last week, SPH Reit declared a first-quarter distribution per unit (DPU) of 1.2 Singapore cents, down from 1.38 Singapore cents the year prior.

The lower DPU, down by 13 per cent year on year, was "in line with the gradual Covid-19 recovery in both Singapore and Australia", said the manager in an interim business update.

Shares of SPH ended Monday flat at S$1.22.