Singapore Press Holdings (SPH) posted its first net loss as it took a hit from the coronavirus pandemic.
The group reported a net loss of $83.7 million for the year ended Aug 31, reversing the net profit of $213.2 million a year ago as Covid-19 severely disrupted all segments of its business, it said yesterday.
The group remains operationally profitable at $110.2 million.
But losses in non-cash fair value of $232 million for investment properties, such as retail assets and purpose-built student accommodation (PBSA), accounted for the net loss.
The property valuation of the retail malls was reduced by $196.5 million and the PBSA assets by $31.9 million.
The main impact of the coronavirus pandemic was partially cushioned by $68.5 million worth of government grants, such as through the Jobs Support Scheme, SPH noted.
Overall operating revenue declined $93.6 million, or 9.8 per cent, to $865.7 million, on the back of a 31.4 per cent decline in media advertisement revenue.
The fall in advertising revenue led the media business segment to post a loss before taxation of $11.4 million, compared with a profit of $54.7 million for the previous financial year. This loss takes into account retrenchment costs of $16.6 million.
Revenue for the media business also fell, by 22.8 per cent to $445.1 million. This was largely due to a decline of 32.9 per cent, or $99.1 million, in newspaper print advertisement revenue, as Covid-19 intensified the structural decline in the advertising sector, SPH said.
But circulation revenue held steady, supported by a 52.5 per cent increase in daily average newspaper digital sales, said SPH, which publishes The Straits Times and Lianhe Zaobao, among others.
Despite the Covid-19 impact, the property segment also saw a rise in revenue, by 10.3 per cent to $327.2 million, boosted by the acquisitions of Westfield Marion mall in Australia and the Student Castle accommodation portfolio.
Revenue from the retail malls was lifted by Westfield Marion but rental waivers of $33.8 million for tenants in Singapore eroded the gains.
Revenue from the PBSA portfolio grew strongly by 60.6 per cent, or $22.1 million, owing to the Student Castle portfolio and a full year's revenue from the acquisitions made in the 2019 financial year. SPH now owns 7,723 beds across 18 cities in the United Kingdom and Germany.
But with the fair valuation loss on investment properties, the property segment turned negative with a loss before taxation of $75.8 million.
Revenue from other channels grew by 8.7 per cent to $93.3 million, owing to higher sales of personal protective equipment in the aged care business.
The segment also posted a pre-tax profit of $1.9 million partly due to the divestment gain on Media Centre of $25.7 million.
SPH chief executive Ng Yat Chung said: "All our major business segments were severely disrupted by Covid-19. Our media business is badly affected by the collapse in advertising.
"However, the 9.4 per cent growth in circulation numbers from the success of our news tablet digital product and higher readership is a bright spot. We are intensifying our digitalisation efforts to transform the news content business in response to evolving demands from our audience."
He added: "We will continue to take a prudent and disciplined approach to liquidity and capital management to weather the Covid-19 crisis with all our stakeholders."
Disciplined cost management saw staff costs easing 1.5 per cent based on a lower headcount and reduced bonus provision. Costs of newsprint and materials were trimmed by 11.2 per cent to $119.7 million.
But total costs were 6.8 per cent higher, partly due to the increased operational costs of running the expanded real estate investment trust and PBSA portfolio, with property tax rebates passed on to tenants, as well as retrenchment costs.
SPH directors proposed a final dividend of one cent per share. Subject to shareholders' approval, this dividend is expected to be paid on Dec 18. Together with the interim dividend of 1.5 cents, the total dividend payout for this year will be 2.5 cents.