Singapore Press Holdings' (SPH) net profit fell 43.8 per cent to S$45.7 million for 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 three Singapore cents in the three months ended Nov 30, 2016, from five Singapore 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 with the main drag coming from the media segment, which saw revenue fall 9.5 per cent to S$201.9 million.
Property revenue increased by 1.3 per cent to S$60.5 million, while other segments - including online classifieds, events and exhibitions - saw revenue rise by 17.9 per cent to S$15.9 million.
In the media business, advertising revenue fell 13.5 per cent while circulation revenue increased by 1.8 per cent due to newspaper cover price hikes that were implemented in March 2016.
SPH has been attacking its costs over the past few years, the latest being wage restraint measures announced on Friday to freeze senior management wages and lower annual increments in 2017.
Some of the restructuring on that front resulted in S$15.9 million of charges during the quarter.
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.
As a result, 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.
Excluding the S$15.9 million in charges, the decline in operating profit would have been by a lower 12.4 per cent, while operating expenditure would have fallen by 5.2 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.
This article was first published on Jan 14, 2017.
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