Singapore Press Holdings (SPH) has reported that its third-quarter profits have crashed by a hefty 44.1 per cent, from S$46.91 million in the third quarter last year to S$26.2 million this year.
The mainstream media conglomerate pointed to a sizeable 16.7 per cent decrease in print advertisement revenue, a lower circulation revenue of S$2.8 million and the lack of contribution from the now divested shareinvestor.com as the reasons behind its dismal performance.
Even as its revenue has slipped by 2.1 per cent Year on Year, from S$254.9 million to S$249.6 million, SPH’s digital media segment posted a good improvement with newspaper digital advertisement revenue rising by 11 per cent in one year and daily average newspaper digital sales increasing by 12.8 per cent in the same period.
SPH said that the decline it experienced this quarter was partially cushioned by its property segment, which includes an aged care facility, UK student accommodation premises, and an Australian retail mall.
Just a few months ago, in April, SPH’s net profit for the quarter that ended in February fell by a hefty 25.7 per cent and the group reportedly lost the interest of advertisers and investors.
SPH’s net profit of SGD S$29.7 million in the second quarter was significantly lower than the S$52.95 million net profit analysts polled by Refinitiv Financial Solutions earlier estimated the organisation would record.
SPH revealed then that the interim dividend of 6.0 cents per share in the second quarter last year has dropped to 5.5 cents per share in this second quarter this year. Its annual dividend had also fallen by a whopping 38 per cent between 2014 and Aug 2018.
Just a day later, SPH shares dropped by 2.4 per cent. The organisation’s dividend yield, which used to be its main draw, dropped to 3.6 per cent which is lower than what other groups like SingTel and DBS Group offer.
The considerable decline in SPH’s net profit recent quarters is not an anomaly. In April 2018, SPH suffered a 25 per cent decline in net profit for the second quarter, as compared to the same period in 2017.
The decline SPH saw in net profit, advertisement and circulation revenue came as the group was in the middle of a massive job cut exercise, retrenching employees and relocating staff to new newsdesks as it sought to cut hundreds of jobs. Several employees at SPH Magazines were also sacked to reportedly prepare for a “digitally driven future”.
These efforts do not seem to have paid off. Interestingly, SPH’s steady decline in net profit has been ongoing since 2017 – the year ex-Chief of Defence Force Ng Yat Chung took over as Chief Executive Officer.
By midday yesterday, shares of SPH went down and were trading at a notable low of S$2.32. A quick look at SPH’s market share over the last five years shows that the organisation’s shares are on a downward spiral: