Seems like many big companies like SPH, SMRT and SBS are struggling with their core business profit margin, while their divestment business is becoming more profitable.
SPH property investment is reaping handsome profit so much so they are thinking of spinning it off as a REIT.
SMRT retail business is booming. SBS outdoor advertising/rental is very profitable too.
SBS outdoor advertising/rental employed only 70 staff but contributed $36.5 M (EBITDA) to their coffer in 2012. Their bus service employing 6,821 staff generated only $40.2M (EBITDA). This is despite a average daily ridership of over 2 million and revenue of $600.9 M.
We have seen SMRT getting into hot soup due to their greed and focus on inflating the company profitability at commuters expense. Their ex-CEO had been so focus on expanding the retail sector arm that she forgotten that SMRT core business is about running the train.
Will the same fate happen to SPH and SBS ?
Note : a coincident that all these companies start with the letter 'S'