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SPH’s digital-first strategy starting to ‘bear fruit’

The highlights of the first quarter results for Singapore Press Holdings include a slower decline of its flagship print offering, an increase in the contribution of its digital offering and its real estate holdings continuing to account for a lion’s share of group profit.

Operating profits stood at $74.8 million for the first quarter of financial year 2019 (Q1FY19) up by 7.6%. The increase was mainly on account of lower operating expenses which fell by $13.8 million or 7.0%. This was because SPH did not have to contend with retrenchment costs this quarter, a significant drain on its resources during Q1FY18.

While still the largest contributor to SPH’s revenue at $162.1 million, the media business continued to shrink. It was down 6.8% from $173.9 million in Q1FY18.

SPH’s CEO Ng Yat Chung said: “The print side of the media business continues to experience headwinds, even as we grew revenue from the digital side of the business.”

Print advertisement revenue declined $9.8million (9.2%) year-on-year. Circulation revenue fell by $4.2 million (10.7%) due to reduction in newspaper print copies. The rate of decline in print was however the slowest it had been in the last four quarters.

On the digital front, according to SPH: “The digital-first strategy is bearing fruit.”

The total digital revenue — including circulation, ads, online classifieds, magazines and other digital portals — increased 10.1% compared to Q1FY18.  The digital circulation had gone up by 24%. 

Running more effective campaigns powered by data analytics and improving the offering for advertisers helped digital ad revenue increase to $14.6 million, up 12.7% from Q1FY18.

Other initiatives by the digital division included the launch of Photonico in October 2018 to leverage SPH’s vast bank of photographic images. SPH’s digital business also acquired a 70% stake in OctoRocket, a B2B e-commerce platform.

Real estate continued to shore up the profits at Singapore Press Holdings, accounting for 55% of group profit.

The property segment clocked in revenue of $68 million, registering a growth of 11.1% from Q1FY18. Announced in September 2018, the student housing initiative in the UK which has been branded Capitol student accomodation contributed $6.3 million in revenue.

Chung said: “We made progress in growing recurring income from the property segment with initial contribution this quarter from our UK student housing assets and we look forward to more contribution.”

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