Singapore Press Holdings (SPH) has reported a net loss of SG$83.7 million this year as COVID-19 is said to have severely disrupted all its business segments. SPH reported a net profit of SG$213.2 million in 2019. Its operating revenue saw a decline of SG$93.6 million this year to SG$865.7 million, on the back of a 31.4% decline in its media advertisement revenue. However, it reported an operating profit of SG$110.2 million in the financial year of 2020.
According to Ng Yat Chung, CEO of SPH, its media business is badly affected by the collapse in advertising. However, the company also saw a 9.4% growth in circulation numbers from its digital products. "We are intensifying our digitalisation efforts to transform the news content business in response to evolving demands from our audience," Ng said, adding that SPH will continue to take a "prudent and disciplined" approach to liquidity and capital management to weather the COVID-19 crisis.
SPH's financial report showed that its revenue for its media business fell by SG$131.7 million to SG$445.1 million. This was largely due to its newspaper print advertisement revenue which declined 32.9% or SG$99.1 million, as COVID-19 intensified the structural decline in the advertising sector. Circulation revenue, however, held steady. SPH saw a 52.5% increase in its daily average newspaper digital sales of 130,598 copies. It is added that its growth in news tablet subscriptions partly compensated for its 12.6% drop in print copies. Loss for its media business before taxation was SG$11.4 million, compared to a profit of $54.7 million in 2019. This is after taking into account retrenchment costs of SG$16.6 million.
It is also reported that SPH's media business continues with its digital transformation roadmap, growing its share of paid and free audience especially during the COVID-19 and General Elections period. The overall digital audience for the period 23 June to 11 July saw a 91% increase.
Moving forward, SPH will continue a "disciplined" approach to cost management, while investing in important areas such as data analytics and personalised content recommendations for subscribers. "We have also strengthened our value proposition in integrated marketing campaigns to advertisers," SPH said in a statement.
One of the ways SPH targeted ad dollars is by establishing a three-year partnership with News Corp Australia (NCA) that brings NCA’s digital marketing service, News Xtend, to Singapore. With this partnership, SPH expands its advertising network to include a "one-stop outcome-based digital marketing solution" for small and medium-sized enterprises (SMEs), it claims. SMEs can sign up for digital marketing packages through a monthly subscription model, and will have the option for their businesses to be marketed online. The marketing will be done through channels including SPH digital assets, programmatic advertising, search engine marketing and social media advertising. Businesses may also add on other SPH media assets to their subscription package, and digital performance metrics can be tracked in real-time through a customer dashboard.
Separately in May, SPH partnered with Google to launch a joint business plan in 2020. The plan covers three main pillars - growing digital advertising revenue, driving the search for subscription audiences in new platforms and developing the digital video content business. On the digital advertising front, SPH and Google will collaborate to boost the programmatic ecosystem and expand advertisers’ budget on programmatic direct. On the subscriptions front, both companies aim to work on reducing churn and friction with Google and experiment the delivery of innovative news experiences through video and audio content.
As part of its cost-saving measures, SPH streamlined its the media sales and magazine operations both domestically and regionally during 2020. The exercise impacted about 140 staff from the Media Solutions Division (MSD) and SPH Magazines, which is about 5% of the overall media group’s headcount. As part of the restructure, it also ceased publications for Cleo, Young Parent and Shape, and also exited the magazine business in Malaysia.
While its media business saw a decline, SPH's retail segment saw an increase of SG$327.2 million in revenue for its property segment. Its revenue was boosted by the acquisition of Westfield Marion in Australia and the Student Castle portfolio in UK despite the COVID-19 impact. Meanwhile, the Woodleigh Residences which is being developed by SPH and its joint venture partner Kajima Development has also seen encouraging sales after the circuit breaker was lifted. To date, SPH reported that 56% of the project (376 units) has been sold.
However, while revenue from its retail malls was lifted by the contribution from Westfield Marion of SG$37.5 million, rental waivers of SG$33.8 million to tenants in Singapore eroded the gains. Additionally, after considering the fair valuation loss on investment properties of SG$228.6 million, the property segment turned negative with a loss before taxation of SG$75.8 million compared with a profit of SG$263 million in 2019.
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