SINGAPORE: Singapore Press Holdings, the publisher of the city-state's largest newspaper The Straits Times, announced on Friday that its net profit for the first quarter ended in November 2016 dropped 43.8% on the year to S$45.7 million.
Lower advertising revenue as well as costs incurred by the ongoing restructuring of its businesses resulted in a sharp profit decline.
Revenue for the period was S$278.3 million, down 6% from S$296.2 million in the corresponding period a year ago. While revenue from the property segment managed to inch up by 1.3% on the year, the media segment saw its revenue decline 9.5% to S$201.9 million due to a 13.5% decline in advertising sales.
The company booked S$7.2 million as retrenchment and outplacement costs, as a part of a restructuring programme which includes shedding up to 10% of its employees, or about 420 people, over the next two years. As of last November, SPH had 4,107 staff members, down from 4,273 a year ago.
To cope with the lower readership for its print publications and falling advertising revenue, SPH adjusted its printing capacity and restructured its video business. S$7.4 million of impairment charges were taken as a result of these exercises.
The company announced plans to run a comprehensive review of its businesses in October 2016, including retrenchment plans for the next two years.
SPH chief executive Alan Chan said in a press release on Friday that the company will "improve cost efficiency with a leaner organisation and wage restraint measures, and grow business adjacencies to diversify revenue streams.”
As a part of the restructuring process, the company merged two of its tabloid papers into one free publication last December. The move was aimed at consolidating the two papers' readerships to attract more advertisers.
While the review of the business is aimed at helping with cost-cutting and buffering earnings decline for a short while, "the focus should be on driving revenue growth instead," said CIMB analyst Jessalynn Chen in a report released in December.
While the company has invested in several new media startups, most of them "continue to be loss making," the report showe
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