SINGAPORE - Investment activity at Singapore Press Holdings (SPH) will be put on hold to conserve cash, while the interim dividend will also be cut in view of the challenging outlook caused by the coronavirus crisis.
The company made the announcements on Tuesday (April 7) as it reported a 9.3 per cent fall in half-year net profit to $77.6 million.
Operating revenue also dipped, down 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 real estate investment trust (Reit).
Second-quarter numbers improved, with the group reporting 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 be adopting the semi-annual reporting format 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 that its share of the overall market has been increasing.
Daily average newspaper digital sales increased by 50.2 per cent in terms of number of copies, 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 the retrenchment costs.
But the property unit reported a rise in revenue of 26.2 per cent to $177.1 million.
Total costs edged up 3.4 per cent to $377.6 million partly due to higher operational expenses from the enlarged student accommodation portfolio and SPH Reit.
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 accommodation business will be affected by university closures and students returning 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 cuts will be effective from this month and will be reviewed at the end of the year.
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."