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SINGAPORE Press Holdings' (SPH) net profit fell 46.4 per cent to S$52.7 million, or three Singapore cents per share, in its fiscal third quarter after making significant impairments due to a weak magazine business.
For the nine months ended May 31, net profit was down 20.7 per cent to S$237.2 million, or 12 Singapore cents per share, the media and property group announced after the market closed on Friday.
SPH is the parent company of The Business Times.
Q3 operating revenue shrank by 5.7 per cent to S$296.7 million, weighed by media revenue's 7.1 per cent decline to S$216.6 million.
The media business saw advertising revenue fall 9.2 per cent to S$15.7 million, while circulation revenue held firm due to cover price increases that took effect in March 2016.
Property revenue, which mostly stems from investments in retail malls, improved by 1.6 per cent to S$60.3 million despite a "subdued retail environment" as rental and services revenue increased.
Other operating income decreased by 34.1 per cent to S$5.1 million as SPH wrote back contingent consideration for an acquired business.
The group recorded a S$28.4 million impairment of goodwill and intangibles, a sharp increase from the year-ago impairment of S$1.1 million. That was "primarily related to the magazine business whose performance was affected by unfavourable market conditions", SPH added.
Recurring operating earnings fell 42.2 per cent to S$60.8 million for the quarter, but would have fallen by a smaller 16.1 per cent if the impairment charges were excluded.
Looking ahead, SPH sees a "difficult" operating environment, and will maintain a conservative stance on its investment portfolio allocation with focus on capital preservation.
"Given the challenging market conditions, the group has embarked on a comprehensive review of its core media business," SPH noted. "The aim is to better address the evolving needs of advertising customers and deliver effective, integrated solutions across various media platforms. In addition, the group will critically examine its product portfolio and identify areas to further enhance operational efficiency."