Singapore Press Holdings print revenue down 6% YOY as advertising and circulation slump

The new-look Business Times

The new-look Business Times

Singapore Press Holdings has reported a six per cent fall in newspaper and magazine operating revenue for the year ending 31 August 2014.

Advertising revenue for the publisher of Straits Times, Business Times and The New Paper was down by S$51.3 million (US$40.3 million), or 6.8 per cent, while circulation revenue dropped by 4.9 per cent, or S$9.7 million.

However, high rental income from the properties the company owns, such as luxury malls Paragon and The Clementi Mall, lessened that the overall operating revenue decline to two per cent for the year.

SPH results

As a result of falling ad revenue, profits before tax from SPH’s newspaper and magazine fell by 16 per cent, while profits from property rose by 7.6 per cent.

SPH profit/loss

Group recurring earnings of $349.0 million were down by $20.3 million, or 5.5 per cent, as lower profit contribution from its print business was partially offset by a better performance from its other businesses, the company stated.

A softening of the property and transport sectors in Singapore partly explained the fall in newspaper ad revenue, the company said in its report, which shows that ad revenue declines have accelerated as the year has progressed. In the fourth quarter of SPH’s 2014  financial year, ad revenue fell by more than 10 per cent year on year.

Newspaper ad revenue

Daily newspaper circulation fell for all titles, although an increase in digital audiences has steadied an overall decline. Print circulations held up for SPH’s smaller circulating newspapers, the newly relaunched Business Times and Tamil Murasu.

SPH circulation declines

Staff costs rose by 7.1 per cent, even though the company has cut its workforce by 3.1 per cent in a year, to 4,204 people. Salary increases and bonuses accounted for the rise in staff costs, the company noted.

Alan Chan, SPH’s CEO, said in a press statement: “Uncertainties in the global macroeconomic environment continue to persist, with escalating geopolitical tensions weighing on the somewhat benign outlook. Against this backdrop, the near-term domestic economic outlook remains modest with the official growth forecast at between 2.5 per cent to 3.5 per cent.”

“FY2014 marks a milestone year for the group,” Chan added. “Having completed the organisational review during the year, the group has undertaken a journey of transformation to counteract the challenges presented by a rapidly evolving media landscape.”

“We have gained traction in our quest and will be intensifying efforts to reinvigorate the core media business. We will also continue to pursue opportunities that position the group for sustainable growth and value creation.  On this note, we look forward to the opening of The Seletar Mall by the end of the year.”

SPH’s results presentation can be read in full here.

The company’s results come six months after SPH’s editor in chief for English and Malay newspapers Patrick Daniel conceded that revenue from digital media could not support the company’s outgoings.

“Right now, digital ad revenues cannot support our cost base. If print revenues fall and there’s not enough digital revenue to take up the slack, then we have a problem,” he said.

“The issue is not that people want to stop reading our content, it’s because we don’t have the revenue to support it.”


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