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SINGAPORE Press Holdings' (SPH) net profit fell 43.8 per cent to S$45.7 million in its fiscal first quarter as retrenchment- and restructuring-related charges exacerbated a decline in the core media business.
On a per-share basis, earnings slipped to 3 Singapore cents in the three months ended Nov 30, 2016, from 5 S cents a year earlier. No dividend was declared for the quarter, in line with the group's existing practice.
SPH, a media and property company, owns The Business Times.
Operating revenue slipped 6 per cent to S$278.3 million during the quarter. Although property and other segments saw higher turnover, revenue from the media segment fell 9.5 per cent to S$201.9 million, dragging down the top line's total.
Operating profit shrank by 28.5 per cent to S$70.8 million as other operating expenses increased by 26.4 per cent to S$45.5 million.
During the quarter, SPH incurred S$15.9 million in charges related to the review and restructuring of its media business. The bulk of those charges came from S$7.2 million of retrenchment and outplacement benefits amid an ongoing retrenchment exercise to reduce headcount by up to 10 per cent over two years. A further S$2.6 million was impaired as a result of optimising printing capacity. SPH also impaired S$4.8 million on an associate as it restructured its video business.
Excluding the S$15.9 million in charges, recurring earnings would have declined by a lower 12.4 per cent year-on-year instead of by 28.5 per cent.
The bottom line was also hit by fair-value losses on hedges for its portfolio investments due to the stronger US dollar. Investment income fell S$12.1 million to a loss of S$1.8 million during the quarter.
SPH said that it expects business conditions for its media business to remain challenging over the next 12 months.
"The group will focus on continued innovation and investment in the media business to stay ahead and stay relevant, improve cost efficiency with a leaner organisation and wage restraint measures, and grow business adjacencies to diversify revenue streams," SPH said.