Singapore Press Holdings’s (SPH) third quarter net profit rose 64.3% to SG$47.4 million compared with the same period a year ago. This was due to lower impairment charges, the group said. Nonetheless, media business revenue continued to decline SG$14.6 million or 8% to SG$167.9 million for 3Q 2018.
However, Ng Yat Chung, chief executive officer of SPH, said the group will "continue to sharpen [its] media capabilities in the face of digital disruption."
We are seeing early signs of a slower decline of our media revenue.
SPH is also facing its digital challenges head on and eyeing digital revenue. It is making key management appointments to boost its “First to Digital” initiatives. SPH’s promotional efforts saw daily average digital circulation copies increased by 121,000 copies from 3Q 2017 to 3Q 2018. Going forward, SPH will continue with more promotions, the publisher said in a press statement.
The E-paper (PDF version of the print paper) is also seeing more than 37,000 unique readers just on The Straits Time alone – this is more than 15% of total ST circulations. SPH added that it “will continue to promote E-paper readership and add new exciting features, while improving its understanding of print readership with valuable data analytics.”
Most recently, SPH partnered with local machine learning start-up, DC Frontiers, in a bid to develop a content recommendation engine driven by artificial intelligence. According to SPH, the content recommendation engine which works using machine learning, will employ both semantic analysis and collaborative filtering algorithms. This will then curate articles for each reader based on his or her individual news consumption habits among other attributes. It aims to understand SPH’s wide variety of content and its diverse base of users.
Anthony Tan, deputy CEO of SPH, has stated that AI technologies “offer great potential in the news and media industry”.
“We are keenly exploring ways to apply them to improve our products and better serve our users. With this engine, readers of The Straits Times and other digital news sites of SPH will soon be able to access more relevant content automatically tailored to their preferences. This will not only enhance the reader journey but also increase internal productivity within our newsrooms,” he added.
The project is a part of SPH’s ongoing drive to “deepen” audience engagement using cutting-edge technology. It will be partially funded by the Infocomm Media Development Authority (IMDA), under its AI business partnership programme.
On the digital ad front, SPH said total digital ad revenue is showing good growth and momentum. The new SMX platform, a data-driven programmatic ad exchange that started operating on 8 May, has been gaining momentum in reaching the Singapore digital population.
The group also welcomed new faces into the management team in the quarter. Ignatius Low, formerly head of media solutions, was appointed CMO, and will spearhead SPH’s integrated marketing strategy with new vigour. SPH also announced a new CTO and a CPO in May.
Overall, group operating revenue was of SG$250.1 million for 3Q 2018. This was SG$9.9 million or 3.8% lower year-on-year (yoy), compared with 3Q 2017. Group recurring earnings or operating profit grew 29.6% to SG$44.4 million, an overall rebound from the same quarter last year.
Revenue for the property segment was slightly lower, declining 2.4% to SG$60.1 million yoy. It is the largest segment in the Group by profit, which accounts for close to 60% of the Group’s profit. It has continued to provide a steady income stream and stability to SPH’s financial performance. Revenue from the other businesses rose SG$6.1 million or 38.5% to SG$22 million yoy, led by contributions from the aged care and education businesses.
“At the same time, we are making efforts to diversify, with new growth thrusts. Our new strategy is to focus on the acquisition of cash-yielding real estate assets overseas. We are also preparing the Aged Care business for overseas expansion,” Ng said.
In the area of property, SPH’s international expansion into other asset sectors has seen progress. A new asset management company Straits Capitol was set up in the United Kingdom to actively review a strong pipeline of deals.
SPH’s Aged Care vertical in Singapore continues to progress with technology partnerships that will help Orange Valley position itself as the leader in nursing home operations. This sets a strong foundation for overseas expansion with lean capabilities. New Singapore property cooling measures on home purchases were introduced on 6 July. As it is a recent development, the Group is still monitoring the potential impact on The Woodleigh Residences, a joint project between SPH and Kajima Development.