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In 2018, SPH holds on to operating profit even as operating revenue declines

Announcing its results for the year ended 31 August 2018 (FY2018), Singapore Press Holdings Limited (SPH) has reported that operating profit held firm at $206.3 million, cushioned by cost savings, even as operating revenue declined $50 million or 4.8% to $982.6 million. Higher investment income of $115.2 million boosted performance across all reporting segments by 24% to $321.5 million. Net profit attributable to shareholders fell $69 million or 19.7% to $281.1 million. This was partly due to the absence of the one-off gain on divestment of a joint venture seen in FY2017. Excluding one-offs, net profit attributable to shareholders improved by 2.4%.

Revenue for the media business fell by $69.6 million or 9.6% to $655.8 million. The business remained profitable though with operating profit of $92.8 million, supported by lower newsprint costs, staff cuts and depreciation charges.

The property segment remained the largest contributor to group profit with revenue of $242.4 million, steady despite a challenging retail environment. Operating profit was $151.8 million.

The first full year contribution from the aged care business ensured that revenue from the others segment grew 34% to $84.4 million.

At SPH, the drive towards digitisation has been at the centre of revitalising its core media business. Highlights of this include the launch of digital subscriptions, driving personalised content and the launch of Singapore Media Exchange a JV with Mediacorp to create a programmatic trading desk. There’s been an enthusiastic embrace of AI, even harnessing it to help writers create headlines with a greater potential for virality

Digital revenue now accounts for 15% of total media revenue and there has been an uptick in average monthly unique visitors to The Straits Times’ e-paper from 37,000 to 39,000.

Digital subscriptions have also bolstered circulation and while ad revenues for print are still slumping, it is declining at a slower pace

On the real estate front, besides increasing stake in Chinatown Point and acquiring Rail Mall, one of SPH’s big property plays was the acquisition of Purpose-Built Student Accommodation or PBSA across six cities in the UK, for £180.5 million, anticipating a huge demand in affordable housing for a young student population.

“Print continues to experience headwinds”

Ng Yat Chung the CEO of SPH said: “Print continues to experience headwinds, but we are seeing encouraging results from our efforts to digitise the core Media Business. We are making good progress in growing our Property, Digital Portfolio and Aged Care businesses, including our recently acquired assets in the Purpose-built Student Accommodation sector.”

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