Yesterday, the Singapore Press Holdings (SPH) announced that it posted a net loss of S$83.7 million for the financial year of 2020, which ended on 31 August (‘SPH posts first ever net loss of S$83.7m for FY20‘, 13 Oct).
The net loss, which is the company’s first-ever, is in contrast with a net profit of S$213.2 million a year ago. SPH’s revenue from media advertising declined by a staggering 31.4 per cent. Revenue for the media business also shrank by 22.8 per cent.
Segments significantly hit even include its property business. SPH’s malls and purpose-built student accommodation (PBSA) assets were hit by non-cash fair value losses of S$232 million. The valuation of its retail malls fell by S$196.5 million while that of its PBSA assets fell by S$31.9 million respectively.
Without the government grants of S$68.5 million through the Jobs Support Scheme, SPH’s net loss would have been even higher. SPH CEO Ng Yat Chung attributed his company’s losses to COVID-19.
“All our major business segments were severely disrupted by Covid-19. Our media business is badly affected by the collapse in advertising,” he said.
“However, the 9.4 per cent growth in circulation numbers from the success of our news tablet digital product and higher readership is a bright spot. We are intensifying our digitalisation efforts to transform the news content business in response to evolving demands from our audience.”
SPH share price dives
Ng, who is the former SAF Chief of Defence Force, was named the new CEO of SPH in May 2017. Since coming on board, he has been laying off people from the company every year, including this year in the midst of the COVID-19 crisis:
- SPH starts retrenching staff, 13 Oct 2017
- SPH Magazines undertakes major restructuring exercise, to retrench 13 staff in March, 20 Mar 2018
- SPH to shed 130 jobs to rein in costs, 18 Oct 2019
- SPH retrenches 140 employees amid impact from COVID-19, 19 Aug 2020
Previously, Ng was heading the Temasek-linked Neptune Orient Lines before it was eventually sold to French Shipping Giant CMA after years of consecutive losses. But within a quarter after taking over, CMA turned NOL back to a $26 million profit in the first quarter of 2017.
And in Aug, when Ng announced the latest job cuts of 140 staff from SPH amid COVID-19 pandemic, analysts were not impressed.
“We have not seen any positive result from its efforts to transform the media business,” said Yi Sin Ngoh, an analyst at CGS-CIMB Securities. Another concern is the possible devaluation of the company’s investment properties at the end of the fiscal year, she said, which came true in yesterday’s company announcement.
Another analyst, Margaret Yang, a strategist at DailyFX added then, “The media business will continue to remain soft.”
In any case, ever since Ng became the CEO of SPH, its share price has been going downwards in the past 3 over years – from about S$3.50 in May 2017 when he first came into SPH to yesterday’s closing (13 Oct) of $1.05.
