SPH records first net loss of S$83.7 million for FY2020 as COVID-19 'severely disrupts' all business segments

SINGAPORE: Singapore Press Holdings (SPH) on Wednesday (Oct 14) reported its first net loss of S$83.7 million for the financial year ended Aug 31, as COVID-19 took a big bite out of all its business segments.

This compares to the net profit of S$213.2 million that SPH posted a year ago.

The loss was reflected in non-cash fair value losses of S$232 million or 3.5 per cent on the investment properties including retail and purpose-built student accommodation assets.

Staff headcount fell from 4,085 in the previous year to 3,808 as of Aug 31, a 6.8 per cent reduction. "Disciplined cost management" saw staff costs decreasing by 1.5 per cent from S$333.3 million to S$328.4 million, due to the lower headcount and reduced bonuses, said SPH.

Government grants totalling S$68.5 million, including $28.1 million of wage subsidies under the Jobs Support Schemes, helped to cushion the impact of COVID-19, the company said.

READ: About 140 employees from Singapore Press Holdings to be 'affected' by retrenchment exercise

Newsprint and material costs were also trimmed 11.2 per cent to S$119.7 million.

SPH said total costs went up by 6.8 per cent or S$53.7 million, to S$844.4 million. The company attributed part of the increase to higher operational costs of running an expanded REIT and PSBA portfolio, property tax rebates passed onto tenants, as well as retrenchment costs.

MEDIA BUSINESS SEES CONTINUED DECLINE

Revenue for SPH's media business continued to fall, dropping 22.8 per cent decline to S$445.1 million.

"This was largely due to newspaper print advertisement revenue which declined 32.9 per cent or S$99.1 million, as COVID-19 intensified the structural decline in the advertising sector," said SPH.

However, its circulation revenue held steady, supported by a 52.5 per cent increase in daily average newspaper digital sales of 130,598 copies. The growth in news tablet subscriptions also partly compensated for the 12.6 per cent drop in print copies.

Compared to a profit of S$54.7 million for the previous fiscal year, SPH said it recorded an S$11.4 million loss before taxation this year, after taking into account retrenchment costs of S$16.6 million.

READ: Singapore Press Holdings to cut 5% of media jobs as part of restructuring exercise

Chief executive officer of SPH Ng Yat Chung said all of SPH's major business segments were severely disrupted by COVID-19.

He said that SPH is "intensifying" its digitalisation efforts to transform the news content business in response to changing demands from its audience.

"We will continue to take a prudent and disciplined approach to liquidity and capital management to weather the COVID-19 crisis with all our stakeholders," said Mr Ng.

PROPERTY REVENUE RISES BY 10.3%

SPH recorded a rise in revenue for its property segment by 10.3 per cent to S$327.2 million, boosted by the acquisition of Westfield Marion, a retail mall in Australia, and a portfolio of student accommodation assets in the UK.  

However, with the fair valuation loss on investment properties of S$228.6 million, SPH's property segment turned negative with a S$75.8 million loss before taxation, compared with a profit of S$263 million in the previous financial year.

A total dividend of 2.5 Singapore cents per share - comprising a normal dividend of 1 cent and an interim dividend of 1.5 cents - was declared.

Subjected to shareholders' approval, these dividends are expected to be paid in Dec 18.