SPH grows net profit 32% in FY17, but will hasten job cuts as media business struggles

SALE of an online classifieds business helped to lift Singapore Press Holdings' (SPH) net profit to a 32 per cent increase in fiscal 2017, but the news and property group will accelerate a previously announced round of job cuts to deal with challenges in its core media business.

FY2017 net profit rose to S$350.1 million, or 22 Singapore cents per share, as the company recognised a S$149.7 million gain from a partial divestment in its online regional classified business and a S$57.4 million fair-value gain from investment properties.

However, operating revenue shrank by 8.2 per cent to S$1.0 billion, said SPH, which is the parent company of The Business Times. The company will pay a final cash dividend of 3 Singapore cents per share and a special dividend of 6 Singapore cents per share for a total of 9 Singapore cents per share. In 2016, SPH paid a final dividend of 8 Singapore cents per share and a special dividend of 3 Singapore cent per share, or a total per-share payout of 11 Singapore cents.

SPH shares closed at S$2.69 on Wednesday, down by 0.7 per cent or 2 Singapore cents, before the results were announced.

Revenue from the media business remained the main drag on overall turnover, decreasing by 13 per cent to S$725.4 million for the year. Advertising revenue fell by 16.9 per cent, or S$102.5 million, while circulation revenue declined by 5.1 per cent or S$8.7 million.

Property revenue rose 1.2 per cent to S$244.2 million. Other businesses, which include events and healthcare, contributed S$62.9 million, up 28.9 per cent from the year before.

The company also incurred a S$96 million charge from impairing its magazine business amid unfavourable market conditions and from writing down printing presses and investments in associates.

Looking ahead, SPH said that it is focusing on managing the disruption to its media business.

The company will complete the full 10 per cent staff reduction announced in October 2016 by the end of 2017, instead of the two-year period previously indicated. Those cuts will come from restructuring its newsrooms and sales operations and reducing 15 per cent of staff in core media divisions.

SPH expects to incur retrenchment costs of about S$13 million in the first quarter of fiscal 2018.

At a press briefing, the company said that the final round of cuts will involve about 230 jobs, of which about 130 are retrenchments. The rest of the headcount reduction will come from retirements, terminated contracts and roles that will be eliminated as a result of the restructuring of work processes. The wage bill could decline by about 8 to 9 per cent as a result.

But the company said that it will also be stepping up its investments to enhance capabilities in digital, data anlytics, radio broadcasts, video and content marketing.