SPH media unit sees 13.6% shrink for Q1 2020 as print ads revenue continues to dip

Singapore Press Holdings (SPH) has reported a 3.8% decline in total revenue for the first quarter ended 30 November 2019. The fall in total revenue was attributed to lower newspaper print advertisement revenue.

According to the financials, revenue for the Media segment for first quarter of 2020 shrank 13.6% to SG$140.1 million as newspaper print advertisement revenue fell 19.8%. However, newspaper digital ad revenue continued to show growth with a rise of 8.8% compared with a year ago.

The media conglomerate also said total circulation volume has grown, attributing it to the recently launched News Tablet campaign. In addition, daily average newspaper digital sales increased by 109,092 copies or 49.8%, outweighing the drop in daily average newspaper print sales of 51,010 copies or 10.3%. However, circulation revenue fell 4.3% or SG$1.5 million for the quarter.

It added that the group continues to focus on digital innovations to address the challenges in the media segment. Following on from the successful circulation drive with the News Tablet campaign for Lianhe Zaobao and Berita Harian, SPH’s flagship The Straits Times is the latest to launch its subscriber package. It added that within three weeks of the December 18 launch, there were more than 5,000 sign-ups, of which more than half are new.

The financials also revealed that profit before tax for the Media segment declined 76.8% in part due to the lower revenue as well as the retrenchment costs of SG$7.2 million. The one-time retrenchment costs arose from a rationalisation exercise involving the media sales and content teams in October 2019.

However, according to SPH, the decline in the Media segment was “cushioned” by improved revenue from the expanded UK student accommodation portfolio and SPH’s real estate investment trust (REIT).

SPH’s total costs rose 6.1% or SG$11.2 million to SG$195.1 million partly due to higher operational costs arising from the enlarged student accommodation portfolio and SPH REIT. Staff costs on the other hand, edged down by 2.4% or SG$2.1 million as part of a policy of ongoing cost management. According to SPH, operating profit was 27.9% lower at SG$53.9 million. However, excluding the retrenchment costs, the media conglomerate said underlying operating profit would have been 18.3% lower at SG$61.1 million.

Ng Yat Chung, chief executive officer of SPH, said the core media business remains challenged as advertisers cut back on their advertising due to the uncertain business outlook. "However, we are encouraged by the response to our digital transformation initiatives including the News Tablet campaign. The recent addition of 2,383 beds to our UK PBSA portfolio and the expansion of SPH REIT into Adelaide post first quarter of 2020 will strengthen our efforts to boost recurring income from the property segment,” he added.

SPH recently has been stealthily hiring from the marketing and advertising community. The company also hired Joanna Ho who last helmed the title of marketing director of Courts for the past two years. Ho, who has also worked with brands such as Shell, OCBC, 3M and SGX, will helm the role of head of business planning and operational efficiency. She will be handling areas such as organisational development on both the talent and training front, and advertiser outcomes integrating both offline to online and eCommerce.

The news comes shortly after Marketing broke the news of industry veteran Helen Lee taking on the role to head up its product development and innovation. She will handle in-platform development for print, digital, radio and OOH, along with cross-platform development. One of Lee’s primary tasks would be to coach the sales team.

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