The slowing economy and ongoing disruption of the media industry continued to weigh on the SPH media business, which saw a 9.5% yoy drop in revenue.
According to SPH this is largely due to a 13.5% fall in advertisement revenue. Meanwhile, circulation revenue was up 1.8% against 1Q 2016, bolstered by the positive impact of newspaper cover price increases implemented on 1 March 2016.
Overall, Singapore Press Holdings reported that for its first quarter ended 30 November 2016 (1Q 2017), net profit attributable to shareholders was 43.8% lower compared to the same period last year (1Q 2016). Group operating revenue fell by 6.0% yoy to SG$278.3 million. The fall in net profit largely arose from a SG$28.2 million year-on-year (yoy) drop in group recurring earnings to SG$70.8 million. This was attributable to charges of SG$15.9 million arising from the media business review and impairment of an associate, and a decline of SG$12.6 million in profits in the media business.
The charges incurred, as the Group moved to implement initiatives identified in a recently completed media business review, comprised mainly SG$7.2 million of retrenchment and outplacement benefits as part of an ongoing Group-wide right-sizing exercise involving a staff reduction of up to 10% over two years, and an impairment charge of SG$2.6 million arising from the optimisation of printing capacity.
The impairment charge of SG$4.8 million on an associate was taken in conjunction with the restructuring of the video business. SPH will also be implementing wage restraint measures in 2017 to further contain costs. Senior management will set the tone with a wage freeze while all other employees will receive a lower Annual Increment.
The performance of the Property segment remained resilient despite a depressed retail environment, with revenue up 1.3% yoy to $60.5 million on higher rental income from the retail assets of the group. Revenue from the group’s other businesses grew 17.9% to $15.9 million against 1Q 2016, lifted by higher contribution from the exhibitions business.
For the quarter, total costs amounted to $211.1 million, 2.6% higher than same period last year.
On the business outlook, Alan Chan (pictured), chief executive officer of SPH, said: “Having completed our comprehensive business review in October 2016, we are forging ahead with our transformative agenda to strengthen the group’s position in an increasingly tough economic and media environment.
“We will focus on continued innovation and investment in the media business to stay ahead and stay relevant, improve cost efficiency with a leaner organisation and wage restraint measures, and grow business adjacently to diversify revenue streams,” he added.