SPH: Should not retrench because … ?

sph

It is time that SPH realized its tough situation.

I refer to the article “SPH chiefs address lapse during retrenchment” (Straits Times, Oct 18).

It states that “Singapore Press Holdings (SPH) chief executive Ng Yat Chung yesterday called on staff to work together to take the company forward, while apologising for the “serious lapse” which locked some 20 employees out of their computers before they were informed of their retrenchment.

The media giant had announced last October that it would reduce its headcount by 10 per cent over two years, but the cuts will now be completed by year end, affecting a total of 230 workers. This figure includes the 130 being retrenched and another 100 staff who are either retiring or having their contracts terminated.

Almost all of those affected by the layoffs have been informed, and the remaining few should be notified by the end of this month, Mr Ng said.”

Arguably, SPH may go down in history as “how not to restructure a business”?

Whether by intention or by accident – it has plunged the morale of its people time and again like a crescendo – which may a have disastrous impact on how those who do business with it – consumers and advertisers, etc, perceive and make decisions in the future on dealing with it.

Why on earth did it announce “last October that it would reduce its headcount by 10 per cent over two years”, and then accelerate “the cuts will now be completed by year end”?

So, are things really so bad that we have to run faster to chase the money game of running a business?

Let’s look at some of the numbers.

According to SPH’s web site – the latest financial ratios

Earnings Per Year rose by 0.06 or 37.5 per cent, from 0.16 to 0.22, from Full Year Aug 2016 to Full Year Aug 2017. It was also higher than Full Year Aug 2015’s 0.20

Price/Revenue rose by 0.35 or 8.9 per cent, from 3.94 to 4.29, from Full Year Aug 2016 to Full Year Aug 2017. It was also higher than Full Year Aug 2015’s 3.76

Net Earnings Margin (%) rose by 10.32 or 43.7 per cent, from 23.59 to 33.91, from Full Year Aug 2016 to Full Year Aug 2017. It was also higher than Full Year Aug 2015’s 27.33

Net Earnings Growth (%) rose by 31.96 per cent in Full Year Aug 2017 compared to -17.53 in Full Year Aug 2016

Return On Asset (ROA) (%) rose by 17.30 or 28.5 per cent, from 4.46 to 5.73, from Full Year Aug 2016 to Full Year Aug 2017. It was also higher than Full Year Aug 2015’s 5.30

Return On Equity (ROE) (%) rose by 2.50 or 33.2 per cent, from 7.54 to 10.04, from Full Year Aug 2016 to Full Year Aug 2017. It was also higher than Full Year Aug 2015’s 8.89

Dividend Per Share (cents) although declining gradually from 24.0 in 2012 was still a respectable 18.0 in 2016

Profit After Taxation  rose by $89.1 million or 29.1 per cent, from $306.1 to $395.2 million, from 2016 to 2017. It was also higher than 2015’s $370.4 million

So, looking at the above numbers – arguably, why didn’t it explore natural attrition by way of retirement, resignations, etc, limiting new hires and transferring staff to other departments, or an across the board pay cut with higher management taking a bigger cut relative to the rank-and-file, instead of a massive retrenchment?

And arguably – why replace its long serving CEO with a sterling record of private sector performance and public service with a General whose first foray into the private sector was with Temasek Holdings, followed by – CEO of Neptune Orient Lines (NOL) – which eventually resulted in the sale of this prized national asset which was losing money, to a foreign buyer who then managed to turn it around with a profit, within the short span of about just a year? (“French company makes NOL profitable – less than 1 year after acquiring it from S’pore“, The Independent Singapore, May 21, 2017)

As a newspaper – shouldn’t we be cognizant of “bad news” coming one after another?

Leong Sze Hian

 

 

About the Author

Leong
Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.