SPH speeds up staff cuts; posts 32% rise in full-year net profit

SPH will restructure its newsrooms and sales operations, in addition to reducing 15 per cent of the staff in these divisions.
SPH will restructure its newsrooms and sales operations, in addition to reducing 15 per cent of the staff in these divisions.PHOTO: ST FILE

SINGAPORE - Singapore Press Holdings (SPH) will accelerate planned staff cuts in a bid to make its core media business leaner and focus resources on long-term growth.

Headcount will be reduced by 230 by year-end, said chief executive Ng Yat Chung on Oct 11.

The figure of 230 includes 130 people who are being retrenched as well as reductions resulting from retirement, termination of contracts and roles that will be eliminated as a result of the restructuring of work processes.

As the company restructures its newsrooms and sales operations, 15 per cent of the staff in these core media divisions are being reduced, Mr Ng added. The planned cuts reflects a push to speed up an earlier programme to shed 10 per cent of headcount within two years.

The group is expected to incur retrenchment costs of about $13 million in the current quarter.

Beyond cost savings, the company is also looking to position itself for longer-term growth, said Mr Ng in his first results briefing since taking over as chief executive on Sept 1.

He said that SPH will step up investments to enhance capabilities in digital, data analytics, radio broadcasts, video and content marketing.

"We will also strive to grow the international reach of our flagship products through better digital subscriptions," he said.

Deputy chief executive Anthony Tan added: "We want to double down on quality journalism, enhance the attractiveness of our core titles and build new ones to reach out to millennials."

Mr Ng said there are no plans to consolidate or shut down any of the company's daily newspapers.

"The newspapers are serving the needs of readers and our clients well," he added.

The media and property group announced these measures alongside its results, which showed net profit rose 32 per cent to $350.1 million for the year ended Aug 31, 2017.

This was due largely to the sale of its online classifieds business 701Search, on which SPH recognised a profit of $149.7 million, as well as a fair value gain on investment properties of $57.4 million.

These gains were partially offset by charges of $96 million which included impairment of the magazine business amid unfavourable market conditions.

In August, SPH had announced that it would divest its 20 per cent stake in Mediacorp TV and 40 per cent holding in Mediacorp Press, the publisher of the Today newspaper, for $18 million. The divestment - which Mr Ng said would allow SPH to focus on its core media business - followed Mediacorp's decision to stop the print edition of Today. SPH has recouped its investment in Mediacorp Press and Mediacorp TV, after taking into account the consideration of $18 million and the dividends received over the years.

SPH has proposed a final dividend of nine cents a share, comprising a normal dividend of three cents and special dividend of six cents. Together with an interim dividend of six cents, total dividend payout for the financial year ended Aug 31, 2017 will be 15 cents a share, down from 18 cents in 2016.

SPH shares closed two cents down to $2.69.

The results were announced after market close.