SPH's plummeting advertising earnings won't slow down soon, say analysts

Its AR declined by 8.6% last quarter.

The media firm’s declining print readership isn’t helping its advertising revenue, and analysts say the downward trend is here to stay.

According to a report by UOB Kay Hian, even in the event that the economy bounces back the decline in print readership will likely more than offset any incremental adspend.

“Display and Recruitment ads down 6.0% and 14.6% respectively. Underscoring the weakness in total ad page counts was the sharp 14.6% decline in Recruitment ads, and a 6.0% decline in Display ads,” the report noted.

Meanwhile, the media business nevertheless continues to be SPH’s primary cashflow generator.

“Its diversification into other businesses, such as property, has yet to supplant the media business. As such, operating cashflow will likely trend the decline in its media business. SPH is unlikely to pay beyond its ability to generate cash, and dividends might be at risk,” the report added.