Investment activity at Singapore Press Holdings (SPH) will be put on hold to conserve cash while the interim dividend will be cut, in view of the challenging outlook caused by the coronavirus crisis.
The company made the announcements yesterday as it reported a 9.3 per cent fall in half-year net profit to $77.6 million.
Operating revenue also dipped 1.3 per cent to $471.4 million in the six months to Feb 29, mainly due to lower newspaper print advertisement turnover. This decline was cushioned by higher revenue from the expanded student accommodation portfolio in Britain and SPH Reit.
Second-quarter numbers improved, with a 5.5 per cent rise in net profit to $31.3 million and operating revenue 1.8 per cent higher at $227.5 million. SPH said it will adopt semi-annual reporting in line with changes made by the Singapore Exchange, while providing business commentary for the first and third quarters.
Revenue in the media segment took a hit in the first half, declining 14.3 per cent to $253.9 million.
Newspaper print advertisement revenue was down 20.4 per cent, though SPH noted its share of the overall market has been increasing.
Daily average newspaper digital sales increased by 50.2 per cent, but circulation revenue fell 5.4 per cent as print sales dropped. Profit before tax for the segment fell 75.4 per cent to $10.3 million due mainly to lower revenue as well as retrenchment costs. But the property unit reported a 26.2 per cent rise in revenue to $177.1 million.
SPH said: "The... results reflect the initial impact of the Covid-19 outbreak. In the media segment, advertising was affected across most sectors with the exception of government spending."
But more disruption is on the way, with reduced footfall at malls due to social distancing measures, while the student lodging business will be affected by university closures and students going home.
SPH added: "In view of the challenging business environment, the group's priority is to conserve cash to sustain its businesses and continue with the digital transformation of the media segment. Other investment activities have been put on hold. SPH recently terminated the proposal to buy five aged-care assets in Canada."
Board members have taken a voluntary 10 per cent cut in directors' fees, while the salaries for other senior management staff will be cut by 5 per cent.
The directors have also reduced the interim dividend to 1.5 cents a share payable on May 22, down from 5.5 cents last year.
Chief executive Ng Yat Chung said: "SPH will continue to provide reliable reporting on the Covid-19 situation and to progress our digital transformation initiatives.
"With the uncertainty over the depth and duration of the Covid-19 pandemic, we will need to adopt a prudent approach in managing our cash flows and our investment activities."