SPH: Gone S$155m, going another S$120m

In Media on 10/05/2021 at 5:01 am

(Writer’s afterword on 12 May 2021 a7 4.30am: This piece underestimates the loss of value to shareholders. Will rewrite soon. Sorry for the ST standard of analysis. LOL)

SPH explained that its operating revenue has halved in the past five years due largely to a decline in print advertising and print subscription revenue caused by an ‘unprecedented disruption in recent years’.

Over the past five years, SPH increased spending in technology, product development and data analytics talent by 48%, to more than S$20m. It has also invested S$35m into digital content and audience development talent in the newsrooms.

So it has spent at leastS$55m on these projects: S$11m a year.

SPH also spent on new consumer-facing digital platforms and products, averaging more than S$20 million a year over the past five years: more than S$100m over 5 years.

It has thus spent over the last 5 years more S$155m or an average of at least S$31m a year.

SPH’s average monthly unique audience across all SPH titles over the past two years has nearly doubled to a record 28 million, with digital circulation surpassing print circulation.

However, digital subscription and digital advertising have been unable to offset the decline in print advertising and print circulation revenues. As a result, SPH expects the losses of the media business to continue and widen.

SPH’s media business … recorded its first-ever loss of $11.4 million for the financial year ended 31 August 2020. If not for the Jobs Support Scheme (JSS), the loss would have been a deeper $39.5 million. For the six months
ended 28 February 2021, pre-tax profit before tax fell 71% to $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 $9.7 million.

S$155m is not all. SPH plans to give away another S$120m to get rid of SPH Media

SPH will provide the initial resources and funding by capitalising SPH Media with a cash injection of $80 million, $30 million worth of SPH shares and SPH REIT units, as well as SPH’s stakes in four of its digital media investments.

That means its NTA falls from S$1.98 to S$1.82: 16 cents (8%).

Btw, SPH’s Chairman, CEO and other board members, and chief editor earn more than a successful global news magazine (Economist prefers to call itself a newspaper) pays similar posts:

Sounds the saying “Pay peanuts, get monkeys” is wrong: Pay gold, get monkeys?

Related post: All those years when SPH was minting $, we had quality journalism meh? 

  1. so sph decided further investment in digital platforms wont reverse the trend; publishing monopoly is now worth little without ad monopoly, so give it back to government

    maybe u prefer to sell to jack ma/jeff bezos like SCMP/WashPost? This tycoon bought LA Times but now he too wants to give it to gov

  2. SPH is giving up more than the $155M and $120M that you’ve mentioned.

    It is also giving away the net assets of its media biz & remaining leases in 2 properties (News Centre & Print Centre) for $1, which they’ve valued at $118M.

    So total shareholder value destruction is almost $400M over 5 years.

    In normal restructuring when a company hives off part of its biz, it collects money for it & shareholders share in the proceeds.

    In SPH case it is paying a total of $238M for somebody to take away its media biz.

    No wonder the share price dropped -15% last Fri.

    As crypto bros will say: Have Fun Staying Poor!

    • Where did u dig this up. Contradicts SPH statement on the face of it.

      • SPH themselves said it during the press conference, announcing the proposed sale of the entire media biz + related properties for a nominal $1.

        They also proudly showed slides of their post-restructuring NAV from $3.6B to $3.36B, which was then splashed across about 30 various news sources & blogs.

        SPH is basically giving away their media biz assets for $1. And then on top of it, also give $110M in cash & shares.

        It’s like you pay me a few million $$$$ to take away your investment property that you’re having trouble renting out. Shiok right??

        That’s why I’m damn SATISFIED with that CEO’s performance lol.

      • As the reduction in NTA is due to 120m dowry paid, I suspect that the entire media biz and related properties had been written down to zero over time. Look forward to reading the EGM doc.

      • Unless I’m mistaken, SPH’s own pro forma numbers of :-

        1) NAV going from $3.602B to $3.364B;


        2) NTA going from $3.3480B to $3.243B; after the restructuring…

        … doesn’t look like just $120M.

        BTW the dowry is $110M, not $120M.

        It’s not a surprise that the share price dropped so much in 1 day — markets are not dumb.

        That being said, SPH share will be good value if it goes below $1.50.

      • Typo in the NTA figures above:

        It’s $3.480B to $3.243B after shoving off media assets.

        So that’s a $237M reduction.

        Minusing away the $110M dowry, that means SPH is valuing its entire media assets at $127M.

      • OK I struck off sentence in my original piece.

      • Saw somewhere S$12om figure. assume biz transferred given S$10 value.

  3. do you think the editorial policy of this english-language newspaper is overly friendly about india and japan ?

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