SINGAPORE – Singapore Press Holdings Ltd (SPH) will transfer its media business to a not-for-profit entity amid the ongoing challenge of falling advertising revenue.
Announcing the move, the company said the exercise involves transferring its entire media-related businesses to newly incorporated, wholly owned subsidiary SPH Media Holdings Pte Ltd.
The media-related businesses include the relevant subsidiaries and employees, news centre and print centre, along with their respective leaseholds, as well as all related intellectual property and information technology assets.
SPH will provide the initial resources and funding by capitalising SPH Media with a cash injection of S$80 million (RM247 million), S$30 million worth of SPH shares and real estate investment trust units, and SPH’s stakes in four of its digital media investments.
“With the resources that SPH is providing upfront and the prospects for public-private partnership funding going forward, we anticipate that SPH Media will have a more sustainable financial future,” said chairman Lee Boon Yang in a filing with the Singapore Exchange today.
“It will have the resources to focus on transformation efforts and quality journalism, as well as to invest in talent and new technology to strengthen its digital capabilities.
“This will ensure that the public will continue to benefit from quality information and credible news from trusted media titles and newsrooms, across different platforms and in vernacular languages.”
On the exercise’s rationale, the firm said the media industry has faced unprecedented disruption in recent years.
SPH’s operating revenue has halved in the past five years, largely due to a decline in print advertising and subscription revenue.
“SPH’s media business has since fallen into the red. It recorded its first-ever loss of S$11.4 million for the financial year ended August 31, 2020. If not for the jobs support scheme (JSS), the loss would have been a deeper S$39.5 million,” said the company.
“For the six months ended February 28, 2021, pre-tax profit fell 71% to S$3.1 million compared with the same period last year. Again, if not for the JSS grant, the media business would have incurred a pre-tax loss of S$9.7 million.”
The transfer of the media assets is subject to SPH shareholders’ approval at an extraordinary general meeting to be convened at a later date. – Bernama, May 6, 2021
