SINGAPORE, Mar 31 — The Singapore Press Holdings (SPH) said yesterday it is undergoing a strategic review to "consider options for its various businesses” in the face of a challenging operating environment and outlook for the firm’s media business.

Despite this, SPH’s board of directors said that the listed company remains undervalued.

In an announcement made after trading ended for the day, the media conglomerate said that the objective of the strategic review is to "unlock and maximise long-term shareholder value”.

SPH owns national dailies The Straits Times and Lianhe Zaobao, among other print and online publications.

Credit Suisse (Singapore) has been appointed as the financial adviser for the review.

SPH added that there is no assurance that the review will result in any transaction or definitive agreement.

The group organises its operations into four business segments: Media, retail and commercial, purpose-built student accommodation and others, which include its investment in online classifieds, aged care and exhibitions.

The announcement comes as it reported a 26.1 per cent growth in net profits to S$97.9 million for the first half of its financial year ending Feb 28, compared with the same period last year.

However, the group’s revenue fell 4.2 per cent to S$460.3 million, dragged down by its media business.

The decline was partly offset by higher rental income of S$15.4 million mainly from its retail and commercial segment and its purpose-built student accommodation, as well as the S$15 million it received through the Government’s Jobs Support Scheme wage subsidies. The scheme provides support to employers to offset part of the wages of resident employees during the Covid-19 pandemic.

SPH’s chief executive officer Ng Yat Chung said: "Despite expanding our audience reach, our media business continues to be affected by the structural decline in advertising and impact of Covid-19.

"We will continue our digital transformation strategy and efforts to place (our) media (business) on a more sustainable footing.”

In August last year, SPH laid off 140 employees from its media sales and magazines operations as part of a restructuring. It was the firm’s third round of retrenchments in three years.

Lagging media business

Revenue for SPH’s media business fell 23.9 per cent to S$193.1 million for the same period, led by falling advertising revenue and loss of revenue from its convenience stall chain Buzz, which it sold in July last year.

Profit before tax for the media business fell 70.9 per cent to S$3.1 million. Excluding the Government’s Jobs Support Scheme grants of S$12.8 million, the segment would have reported a loss of S$9.7 million.

Circulation revenue dropped 4.7 per cent to S$3 million as daily average newspaper print sales fell by 16 per cent.

This was cushioned, however, by a 20.2 per cent rise in digital newspaper sales of around 70,000 copies a day on average.

In the first half of its financial year, the number of digital copies sold made up 53 per cent of the company’s total circulation, surpassing its print copies.

In other areas, revenue for its retail and commercial segment rose 4.4 per cent to S$154.6 million as tenant sales for the retail sector improved in line with Singapore’s economic recovery from the impact of Covid-19.

Revenue for its purpose-built student accommodation segment grew 24.2 per cent to S$35.3 million, mainly due to the contribution from the Student Castle portfolio, which comprises its student lodging assets in the United Kingdom that the group acquired in December 2019.

SPH shares closed at S$1.50 yesterday, up more than 50 per cent from its recent low of S$0.99 in October last year. — TODAY