Singapore Press Holdings’ (SPH) core media business’ pre-tax profits fell by a whopping 76.8 per cent in the first quarter of 2020, going from S$32.3 million in 1Q 2019 to S$7.5 million in 1Q 2020, according to the organisation’s latest financial results.
SPH explained that the decrease in pre-tax profits was due to retrenchment costs and a revenue decline of S$22 million during the quarter. The organisation had paid out S$7.2 million to staff whose jobs were axed in a mass retrenchment exercise during the period under review.
While the profit decrease was partially cushioned by a reduction in materials, production and distribution cost during the quarter, SPH’s core media business continues to see a decline in advertising revenue and circulation revenue.
Total revenue for the media business declined by S$22 million, going from S$162.1 million in 1Q 2019 to S$140.1 million in 1Q 2020.
While digital advertising and digital circulation revenue rose by 8.8 per cent and 49.8 per cent respectively, total advertising and circulation revenue continued to falter as print advertisement revenue declined by S$17.7 million (19.8 per cent) and daily average newspaper print sales declined by 10.3 per cent.
SPH’s chief executive officer Ng Yat Chung said: “Our 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.”
CEO Ng has been focused on expanding SPH’s real estate business even as the core media business struggles. In the first quarter of 2020, revenue for SPH’s property segment rose by S$12.9 million (18.9 per cent), from S$68 million in 1Q 2019 to S$80.8 million in 1Q 2020. Pre-tax profits rose by 38.2 per cent for the property portfolio.
Revenue for other SPH portfolios declined by S$1.2 million (4.8 per cent), from S$24.2 million in 1Q 2019 to S$23.1 million in 1Q 2020.
Despite the gains in its property business, the poor performance of its media business has caused SPH’s total revenue to drop by 3.8 per cent or S$9.7 million.