Investors in Singapore Press Holdings Ltd.&rsquo s shares, trading near their lowest level in about three decades, showed little reaction to the company&rsquo s latest round of job cuts.

The newspaper-to-real estate firm has reduced 140 people, or 5% of staff from its media business as the coronavirus pandemic erodes advertising sales, it said in a statement after yesterday&rsquo s market close.

 

The job reductions will cost about $8 million, the company said, while adding that its real estate unit&rsquo s construction, rentals and valuations are also suffering due to the virus-induced economic downturn.

 

Shares in the media group have lost half of their value this year and been dropped from the benchmark Straits Times Index. The stock fell as much as 1.8% before trading little changed. Still, trading volume was only about a fourth of its 3-month average.

Here are some comments from analysts:

 

Still Waiting for Good News

 

&ldquo We have not seen any positive result from its efforts to transform the media business,&rdquo said Yi Sin Ngoh, an analyst at CGS-CIMB Securities International Pte. Another concern is the possible devaluation of the company&rsquo s investment properties at the end of the fiscal year, she said.

 

Rental Income is Key

 

&ldquo From a revenue point of view, SPH is more of a property company than a media one so an economic recovery brought by the gradual re-opening in tourism and business will underpin its rental income,&rdquo said Margaret Yang, a strategist at DailyFX. &ldquo The media business will continue to remain soft.&rdquo

 

&lsquo Rock Bottom&rsquo

 

The latest retrenchments won&rsquo t have any impact on the shares as the company has continually been right-sizing its media business, said Joel Ng, analyst at KGI Securities (Singapore) Pte. &ldquo Its valuations are already near rock bottom, hence we believe downside risk is minimal.&rdquo

SINGAPORE Press Holdings (SPH) will shed about 140 jobs, or 5 per cent of the media group&rsquo s headcount, as it restructures its media sales and magazine operations.

 

The exercise comes as the group seeks to transform its media business and as it grapples with declining advertising revenue owing to the Covid-19 pandemic. 

 

In a filing to the Singapore Exchange on Tuesday, SPH said that 140 staff from the media solutions division and SPH Magazines will be affected. The retrenchment costs of about S$8 million will be recognised in Q4 FY20.

 

Last year, SPH &ndash which owns publications such as The Business Times - embarked on a review of its media business to offer advertisers more effective marketing solutions by taking on an integrated sales approach across its various platforms and titles.

 

Aside from introducing self-service options to tailor campaigns for advertisers, it has also ramped up efforts to share content across its print, digital and voice platforms. &ldquo The streamlining of operations for greater efficiency and synergy has led to the redundancy of some roles,&rdquo said SPH in the filing.

 

Chief executive of SPH, Ng Yat Chung, said: " Subscriptions and readership of our news titles have increased since the onset of Covid-19. However, the economic downturn has significantly impacted our advertising revenue. A more integrated approach of producing and selling our content across our various platforms will allow us to deal more efficiently and effectively with the new level of demand we are seeing from our advertisers and audience."

 

The Ministry of Manpower, the Creative Media and Publishing Union (CMPU) and NTUC have been informed, SPH said. Affected staff will receive compensation on the terms that the union has agreed on. SPH has also been working closely with the union and NTUC' s Employment and Employability Institute (e2i) to ensure that affected staff receive the help and support they require during this period, the media group said. This will be in areas such as employability training, career coaching and job placement.

 

David Teo, president of CMPU, said: " SPH management informed CMPU in advance of its restructuring exercise. Since then, CMPU has worked closely with SPH management to ensure the restructuring exercise was conducted in line with guidelines stated in NTUC&rsquo s Fair Retrenchment Framework as well as the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment. CMPU and SPH management jointly reviewed the selection criteria to ensure that the Singaporean Core within the company is safeguarded as far as possible." He added that the union negotiated for a fair compensation package for the affected employees.

 

SPH has reviewed costs, reduced discretionary spending and introduced salary cuts for senior management since the pandemic struck earlier this year. In March, it announced its directors &ndash including Mr Ng &ndash and senior management would take voluntary pay cuts of 10 per cent and 5 per cent respectively.

 

In a corporate presentation uploaded on SGX on Tuesday, SPH said that the pandemic has had " significant adverse impact" across all its business segments - media, retail, purpose-built student accommodation and aged care - and that recovery would take time. However, it also highlighted that the group has a healthy balance sheet, with a healthy cash position. In the media business, while ad revenue has been " severely impacted" , circulation year-to-date for FY20 is up 9.8 per cent year-on-year.