Property arm saves SPH from recording declining profits in all sectors
Singapore Press Holdings (SPH) reported yesterday (13 January) that net profit for their first-quarter had dropped an astounding 21.9% compared to the same period in 2014. However, they still managed to reap a handsome post-tax profit of $69.4 million, although falling shy of the $88.8 million made a year ago. So there’s no real reason to feel bad for the company that prints almost all the newspapers and magazines we read everyday.
SPH said that the main reason as to the decline was due to the bad economic climate, negatively affecting the demand for advertising. This sentiment was echoed by OCBC in a separate article, suggesting that the fall was caused by a reduction in revenue from newspapers and magazines, SPH’s main businesses.
Circulation revenue fell by 6.8%. Maybe there have been more angsty tree-huggers in Singapore boycotting the newspapers printed on precious trees that could have had helped slow global warming.
Advertisement revenue, on the other hand, have been falling since 2010 and fell 8% this quarter. Not much surprise there, since advertisers are turning to online publications that see more traffic in this age of technology.
Expenditure also fell, largely due to the decrease in operating costs from reduced circulation. Staff costs remained relatively stagnant apart from a slight increase of 1.7% from the year before. This despite a drop in the number of SPH staff, from 4322 to 4310.
“The global macroeconomic outlook remains muted and fraught with lingering concerns over a confluence of risk factors including rising interest rates, deflationary pressures, geopolitical tensions and a global pandemic outbreak. Against this backdrop and a tight labour market in Singapore, the domestic economy is expected to post modest growth.”
-Alan Chan, Chief Executive Officer of SPH
Chan also said that 2015 would usher in a greater number of online initiatives. SPH acquired a 60% majority stake in data analytics firm CoSine Holdings to further strengthen and support SPH’s digital classifieds business. SPH also decided to venture into the burgeoning education business in August 2014 by acquiring a 22% stake in Mindchamps.
Chan acknowledged that the media scene is changing quickly, and promised to keep looking out for good business opportunities that will place SPH on the road towards sustainable growth, whilst continuing to try and breathe life into their dying core media business.
Although readership may be declining, it’s unlikely that SPH will ever see red, given the monopoly they have on the print business in Singapore. That’s good, since we have seen many quality pieces from them of late, especially the column on taxi drivers by Manpower Correspondent Toh Yong Chuan which drew praise from many readers. Apart from a pro-government style of reporting, there’s really nothing else to criticise SPH about.