Blame the measly -0.5% growth on dipping newspaper page count.
According to Nomura, SPH’s August newspaper weekly page count was down 4.6% y-y, based on our monthly average, an indication that display advertising was weaker last month.
Here's more from Nomura:
In fact, based on our page count, display advertising is flat for 4QFY12 for the newspaper group, an indication that the segment has only just held up for the whole of SPH’s financial year.
Given that display advertising is the only newspaper advertising segment which has held up relatively well in the previous two quarters, we believe this is likely to show that FY12F newspaper advertising should remain on a declining trend in 4QFY12F.
In 3QFY12, SPH's core newspaper and magazine division saw a 4% y-y decline in pre-tax profit to SGD92mn. While this was sequentially higher (+9.5% y-y) than the SGD84mn achieved in the seasonally weaker 2Q12, for the 9M12 period, newspaper/magazine net profit is down 6% y-y to SGD263mn.
In 3QFY12, revenue from the core newspaper and magazine business segment was flat at SGD261mn, with print advertising holding at SGD201.8mn (+0.4% y-y) and display ads revenue increasing 2.9% y-y, while classifieds fell a sharp 9% y-y.
Circulation revenue also declined 3.6% y-y to SGD51.8mn on fewer copies of the group’s newspapers sold during the three-month period.
Given the weak 4QFY12 display advertising performance as seen from our August page count, we have cut our newspaper advertising growth estimate to -0.5% from the mild 2% growth in our earlier assumption.
Display advertisements accounted for 61% of the group’s total print advertisement revenue of SGD583mn in 3QFY12, while classifieds accounted for 28% and magazines\others for 11%.
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