SPH to restructure media business into not-for-profit entity

 

Singapore Press Holdings Ltd (SPH) will transfer its media business into a not-for-profit entity amid the ongoing challenge of falling advertising revenue.

Announcing the move, SHP said the exercise involves transferring its entire media-related businesses to a newly incorporated wholly owned subsidiary, SPH Media Holdings Pte Ltd.

The entire media-related businesses include relevant subsidiaries, relevant 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 (RM330 million), S$30 million worth of SPH shares and SPH REIT units, as well as 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,” chairperson Lee Boon Yang said 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,” he added.

On the rationale of the exercise, SPH said the media industry has faced unprecedented disruption in recent years.

The company’s operating revenue has halved in the past five years due largely to a decline in print advertising and print 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 Aug 31, 2020. If not for the Jobs Support Scheme (JSS), the loss would have been a deeper S$39.5 million.

“For the six months ended Feb 28 this year, pre-tax profit fell 71 percent to S$3.1 million compared to 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,” it said.

The transfer of the media assets to the CLG is subject to SPH’s shareholders’ approval at an extraordinary general meeting to be convened at a later date.

- Bernama