Deutsche Bank report : July adex: One of the largest Newspaper adex contractions in 3 yrs

According to latest data from The Nielsen Company, total adex for Singapore continued its downward trend in July.

Specifically, the July adex (ex-Internet) slipped 1% YoY to S$190m, although the S$1m absolute YoY contraction represented a deceleration from Jun’s S$6m YoY decline. While the July total adex contraction was relatively mild, this masked a S$4m contraction in Newspaper adex – one of the most severe absolute contractions over the past 3 years.

Adex also fell across most other platforms and Bus/Taxi and Posters were the only two segments which reported any convincing adex growth. July’s print adex (Newspaper and Magazines) was down 5% YoY to S$84m.

Relatively muted advertising revenue performance expected for FY12e

Based on current run-rates, we estimate SPH booked approximately S$123m advertising revenues in the first two months of 4Q12e. These, along with the S$583m already booked in 9M12, would bring YTD advertising revenues to approximately S$707m – leaving some distance to cover to our full year forecast of S$806m.

With the relatively weak adex performance, we expect SPH’s near-term operational performance will remain subdued. We believe the stock will maintain its range-bound behavior but recommend Hold for the yield.