SPH back in the black with $92.9m net profit for FY2021

Revenue for the media business fell $85.8 million due to lower advertisement revenue and circulation revenue. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Singapore Press Holdings (SPH) posted a net profit of $92.9 million for the financial year ended Aug 31, rebounding from its first net loss last year.

The mainboard-listed company saw improved performance across all its non-media business segments, including retail and commercial, as well as purpose-built student accommodation (PBSA), despite the ongoing Covid-19 disruptions, it said on Tuesday (Oct 5).

SPH, which publishes The Straits Times and Lianhe Zaobao, reported an operating profit of $206.7 million for the year for its non-media operations, up 69.8 per cent from a year ago, driven by higher income from growth in portfolio assets under management.

The media business is undergoing restructuring. Last month, SPH shareholders voted in favour of transferring SPH's media business to a company limited by guarantee (CLG). The transfer is expected to be completed in December.

The company's directors have proposed a final dividend of three cents per share. The dividend is expected to be paid on Nov 30, subject to shareholders' approval.

Together with the interim dividend of three cents per share, the total dividend payout for the current financial year is six cents per share, compared with 2.5 cents last year.

Total revenue for its non-media operations grew 2.4 per cent to $475.1 million due to higher rental income from its retail and PBSA segments, driven by its expanded portfolios and lower rental relief for tenants. This increase was partially offset by the absence of revenue from the sale of masks by its aged care business.

At the same time, total costs fell 21.6 per cent due to lower costs of its aged care business, in line with lower revenue, as well as the absence of impairment of intangible assets.

Meanwhile, its media operations had a loss of $128.3 million for the full year, including $115.3 million in media restructuring costs.

Excluding restructuring costs and factoring in wage subsidies under the Jobs Support Scheme, the segment's operating loss came in at $13 million.

An additional loss of about $115.5 million - arising from another contribution of $80 million in cash, SPH Reit units and SPH ordinary shares for the maintenance of the media business - will be recognised in the next financial year, the company added.

Across FY2021 and FY2022, media restructuring costs will come to around $243.3 million, including $12.5 million of transaction costs.

SPH noted that revenue for the media business fell $85.8 million, or 17.5 per cent, due to lower advertisement revenue and circulation revenue.

Print advertising revenue continued to fall, declining 14.7 per cent from the previous year.

Total digital revenue also dipped 5.9 per cent from the previous year, with lower circulation and other revenue.

Chief executive Ng Yat Chung said: "We took the difficult decision earlier to restructure the media business. That will enable SPH to avoid future losses and funding needs from the media business and we will focus on expanding the portfolio of the non-media business.

"The next step is for shareholders to consider the privatisation offer from Keppel."

The privatisation offer by Keppel Corp is expected to be decided by shareholders around mid-November.

The company said it continues to maintain a prudent and disciplined approach to capital management by maintaining a healthy balance sheet as well as diversified sources of funding. After taking into account the media restructuring cost, the net asset value per share as at Aug 31 was $2.18.

SPH shares closed 0.5 per cent higher at $1.98 on Tuesday.

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