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SINGAPORE: Singapore Press Holdings (SPH) reported its first net loss of S $ 83.7 million for the financial year ending August 31, as COVID-19 took a big bite across all of its business segments.
This compares with the net profit of S $ 213.2 million reported by SPH a year ago.
The loss was reflected in non-cash fair value losses of S $ 232 million or 3.5 per cent on investment properties, including Retail Assets and Purpose Built Student Accommodation (PBSA).
Government grants totaling S $ 68.5 million, including $ 28.1 million in wage subsidies under employment support schemes, helped cushion the impact of COVID-19, SPH said on Tuesday (October 13).
SPH posted an operating profit of S $ 110.2 million in fiscal 2020, even though its performance in the second half of the financial year was significantly affected by the “circuit breaker” period.
Operating income fell 9.8 percent or S $ 93.6 million to S $ 865.7 million, while media advertising revenue fell 31.4 percent.
SPH said disciplined cost management saw personnel costs drop 1.5 percent to S $ 328.4 million, based on lower headcount and reduced bonuses.
READ: Approximately 140 Singapore Press Holdings employees will be ‘affected’ by the downsizing exercise
Newsprint and materials costs were also down 11.2 percent to S $ 119.7 million.
SPH said total costs increased by 6.8 percent, or S $ 53.7 million, to S $ 844.4 million. The company attributed part of the increase to higher operating costs of running an expanded portfolio of REITs and PSBAs, property tax rebates passed on to tenants, as well as costs of reduction.
THE MEDIA COMES ON THE NETWORK
SPH’s media business revenue continued to decline, falling 22.8 percent to S $ 445.1 million.
“This was largely due to newspaper print advertising revenue declining 32.9 percent or S $ 99.1 million, as COVID-19 intensified the structural decline in the advertising sector,” said SPH.
However, its circulation revenue was flat, supported by a 52.5 percent increase in average digital newspaper sales of 130,598 copies. The growth in news tablet subscriptions also partially offset the 12.6% drop in print copies.
Compared to a profit of S $ 54.7 million in the previous fiscal year, SPH said it posted a pre-tax loss of S $ 11.4 million this year, after accounting for downsizing costs of 16.6 million Singapore dollars.
READ: Singapore Press Holdings to cut 5% of media jobs as part of restructuring exercise
SPH CEO Ng Yat Chung said that all of SPH’s major business segments were severely affected by COVID-19.
He said SPH is “stepping up” its digitization efforts to transform the news content business in response to the changing demands of its audience.
“We will continue to take a prudent and disciplined approach to liquidity and capital management to weather the COVID-19 crisis with all of our shareholders,” said Mr. Ng.
PROPERTY INCOME INCREASED BY 10.3 PERCENT
SPH reported an increase in revenue from its property segment by 10.3 percent to S $ 327.2 million, driven by the acquisition of Westfield Marion, a shopping center in Australia, and a portfolio of accommodation assets for students in the UK.
However, with the fair valuation loss on investment properties of S $ 228.6 million, SPH’s property segment turned negative with a pre-tax loss of S $ 75.8 million, compared to a gain of S $ 263 million in the previous year.
A total dividend of 2.5 Singapore cents per share was declared, comprising a normal dividend of 1 cent and an interim dividend of 1.5 cents.
Subject to shareholder approval, these dividends are expected to be paid on December 18.
