SINGAPORE (Apr 7): Singapore Press Holdings (SPH) has reported earnings of $31.3 million for 2QFY2020 ended February, a 5.5% increase from $29.7 million a year ago. 

However, the group’s increase in the second quarter proved insufficient in lifting its earnings for 1HFY2020, which came in at $77.6 million, or 9.3% lower than the previous year. 

Earnings per share for the quarter came in at 0.02 cent, unchanged from the previous year. 

Total revenue for the quarter inched up 1.5% to $231.3 million from $227.8 million in 2QFY2019. 

The group booked a 1.8% increase in operating revenue to $227.5 million on the back of a 33% jump in contributions from its property segment. This was, however, partially offset by declines of 18.3% and 6.5% in advertisement and circulation revenue segments respectively. 

A breakdown of the group’s business segments for 1HFY2020 revealed that revenue for the group’s media business fell 14.3% to $253.9 million in 1HFY2020. This was partially mitigated by higher revenue contributions from the group’s acquisitions of Figtree and Westfield Marion properties. 

Circulation revenue for the first half of the year slid 5.4% as daily average newspaper print sales decreased by 10.7%. However, the group’s daily average newspaper digital sales doubled to 110,355 copies. 

Consequently, the media segment’s profit before tax plunged 75.4% y-o-y to $31.7 million due to the revenue decline, as well as retrenchment costs of $7.2 million. 

The property segment, however, appeared to be the group’s saving grace for the first half of the year. SPH’s PBSA portfolio’s revenue soared 127.3% to $15.9 million on the back of its acquisitions in FY2019. The group also recognised a fair value gain of $10.5 million arising from an adjustment to the purchase consideration of an asset in the PBSA portfolio.

As at end-February, cash and cash equivalents stood at $502.1 million. 

The group has proposed an interim tax-exempt dividend of 1.5 cent per share, some 72.7% lower than its dividend of 5.5 cents per share a year ago. The dividend is expected to be paid out on May 22. 

“After careful consideration, the Directors have decided to reduce the amount of the interim dividend in view of the uncertainty over the Covid-19 impact on the Group’s businesses,” says SPH.  

“The Board seeks shareholders’ understanding and wishes to express its thanks for their support during these challenging times,” it adds. 

In its outlook statement, SPH notes that its results reflect the initial impact of the Covid-19 outbreak on its business segments. Notably, advertising in its media segment was affected across most sectors with the exception of government spending

In light of the challenging business environment, the group says its priority is to conserve cash to sustain its businesses and continue with the digital transformation of the media segment, while other investment activities have been put on hold. 

The group had also recently terminated the proposal to buy five Aged Care assets in Canada. 

“SPH will continue to provide reliable reporting on the Covid-19 situation and to progress our digital transformation initiatives,” says SPH CEO Ng Yat Chung. 

“With the uncertainty over the depth and duration of the Covid-19 pandemic, we will need to adopt a prudent approach in managing our cashflows and our investment activities,” adds Ng. 

SPH CEO and board members have also taken a voluntary 10% reduction in directors’ fees in line with the company’s cost-saving measures. Other senior management staff will see a salary reduction of 5%. These cuts will be effective from April, and are expected to be reviewed at the end of the year. 

In a separate filing on Tuesday, SPH revealed it is being sued by the founders of StreetSine Technology Group (SSTG) for alleged “unlawful means conspiracy”.

SPH had acquired a 60% in SSTG for $30 million in cash in 2014. Among other things, the tech firm operates Singapore Real Estate Exchange (SRX), which was then integrated with SPH’s STProperty into a single digital property listing platform.

See: SPH sued for alleged 'unlawful means conspiracy' by founders of tech firm behind real estate platform SRX

Shares in Singapore Press Holdings closed five cents higher, or 3.2% up, at $1.60 on Tuesday prior to the results announcement.