Singapore Press Holdings loses 25% in profits, launches $80m New Media Fund
Singapore Press Holdings (SPH), the country’s largest newspaper publisher, announced that its net profit has fallen 25 percent to S$431 million ($346 million) from the previous financial year. The steep drop-off is partially due to a decline in its print publication and advertising businesses:
SPH through the years | Infographics
While SPH’s magazine and newspaper revenue — which includes income from print ads — fell only by a single-digit percentage from the previous year, the loss still amounted to S$40 million ($32 million). A larger chunk of the Group’s profit evaporated due to a decline in investment income, rising operating expenses, and increased marketing spending for its online businesses.
Although SPH’s print division has been resilient compared to Western counterparts in the face of changing media consumption habits, its newspaper readership has in fact been slowly declining since its peak in 2009.
As readership decreases, SPH’s startup activity could rise
In this environment, SPH CEO Alan Chan’s announcement of a S$100 million ($80 million) fund, which will invest in media-related businesses, is hardly surprising. While details are scarce for now, it’s likely that Singapore-based and regional media-related startups, a rather vague categorization, will benefit.
In fact, SPH has already sunk money into a number of online businesses. This year, it acquired Singapore’s top car portal sgCarMart for $48 million and also invested $1.45 million in restaurant reservation site Chope. This is its second wave of investment activity — it acquired HardwareZone for $4.5 million in 2006 and ShareInvestor.com for $12 million in 2008.
A possible move for SPH would be to replicate MediaCorp, another prominent Singapore media player, by funding e-commerce businesses. With both online and offline traffic as its biggest asset, SPH would be in position to drive referrals to generate online consumer purchases, blurring the line between editorial work and online retail. Already, SPH Magazines has a close working relationship with one such startup: Carousell, a Singapore-based mobile marketplace app.
Given the potential benefits that startups might reap from SPH’s eagerness to invest — and it may grow more enthusiastic if its print ad revenue continues to fall — the Group’s financial performance is surely the indicator to watch if you’re running a media-related business.
(Editing by Josh Horwitz and Paul Bischoff)
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