One-two punch leaves SPH reeling and turning towards new business initiatives

It’s cutting its costs to reduce the bleeding.

Weaker ad revenues will take some time to get used to for Singapore Press Holdings (SPH), but the dim tourist arrivals isn’t exactly helping.

According to analysts from UOB Kay Hian, there’s no foreseeable let up for SPH’s weakening advertising revenues, with a 2.4% decline for total ad pages in 1QFY16.

“Recruitment ads saw a 9.7% decline yoy, Classified ads saw a 10.5% improvement yoy while Display ads saw a 4.5% decline yoy. Except for Display ads, the changes represent an improvement from 4QFY15,” UOB Kay Hian said.

Meanwhile, tourist arrivals are a little optimistic though, with latest tourism data pointing towards a 3% uptick in arrivals.

In what is brewing to be perfect storm for SPH, it hopes to alleviate the damages through cost cutting and multiple business initiatives.

“The weak tourist arrival numbers have two effects: a) cautious adspend by retailers due to lower tourist spend and locals becoming increasingly savvy in e-commerce, b) weakening rentals in the Orchard Road area, which have declined 2.9% since 4Q14,” UOB Kay Hian said.

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