Saturday, October 9, 2010

SPH 2010 Final Dividends Prediction

Given that Sky Eleven has ceased contribution for 4Q10, I believe management will be cautious in dishing out dividends. Management is unlikely to cut dividends and have a higher tendency to increase dividends to signal growth and support share price. Hence I expect final dividends to be raised from 18 cents in 2009 to 19 cents in 2010.

Print expenses are expected to decrease due to cheaper US$ and lower circulation demand.

Total profits are expected to be much higher than 2009 due to SPH portfolio and advertising revenue recovery.

Final contribution from Sky Eleven will definitely help to propel SPH profits to near record high.

I predict FY 2010 profit to be in the region of $580M, EPS of 32.5 cents.

Of course I am striking a balance to be optimistic and objective, since a large part of my networth is determined by SPH. I do hope that SPH can deliver 21 cents of final dividends. This would likely propel it to breach the $4.60 mark by Dec 10.

Results will be out after 6pm on Oct 12. Let's see how far my prediction is away from actual results.
Post script: SPH delivered 20 cents of final year dividends, EPS 31 cents. Operating profit of $539M, circulation down by 2.4%, printing cost lowered by 29%. Final contribution from Sky@Eleven of $154.2M. Investment income recorded $39M, a turnaround from last year's loss of $6.2M.
Surprisingly, my projection was the closest than all the reports available in the market.


Musicwhiz said...


Which is more important - cash flow generation of SPH or the share price of SPH? I got a little confused as you combined the two quite frequently when discussing SPH.

Because if you focus on the cash flows of SPH (i.e. dividends), then the share price should not matter too much. But if share price is important, then I assume you intend to sell; hence dividends should not matter much.


Sgbluechip said...

Hi MW, both are equally important. Capital appreciation and dividends form the total returns of any stock. Ideally, a stock should have high dividend yield and capital appreciation to provide investors peace of mind holding the stock in bad times and good times.

In other words, my cost of holding a stock approximates to zero in the long run after factoring the dividends as it has returned me the cost price of the stock.

If I really have to choose, I think total returns is the most important.

Perhaps ARA can fit my description, considering it have appreciated more than 100% of my purchase price with a divided yield of about 8%.

I am still waiting for the day I can own the stock for "free" without selling any shares.

Citigold said...

FY 2011 will not be as impressive as FY 2010 due to sky@11 contribution had been recognized.Next key growth for SPH would be MICE business and rental income fr Clementi Mall.