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Denise Tsang

Publisher Sing Tao Holdings plunged to a $13.79 million attributable loss in the six months to September from a $121.21 million profit in the same period last year, troubled largely by a sharp drop in advertising revenue and property sales.

 Its flagship dailies Sing Tao Daily News and Hong Kong Standard were hit hard by the advertising market downturn, with their combined turnover dropping $270.3 million.

 The poor performance raised concern over the prospects for the proposed sale of a stake in the company.

 Sing Tao chairman Sally Aw Sian has agreed to sell a 23 per cent interest for $115 million to Dublin-listed investment fund China Enterprise Development Fund (CEDF).

 A prime condition of the deal is satisfactory due diligence of Sing Tao's balance sheet and operations.

  The company said Sing Tao Daily News suffered a 20 per cent decrease in turnover due mainly to dwindling property classified advertisements.

 The Hong Kong Standard saw turnover slump 40 per cent as a result of thin recruitment classifieds.

 Salomon Smith Barney regional media analyst Kaushik Shridharani described the company's performance as 'embarrassing'.

 Sing Tao's turnover almost halved to $659.82 million from $1.18 billion previously. The operating loss was $62.21 million against a $156.61 million profit previously.

 The company booked a $53.1 million exceptional gain from a string of agreements that grouped its newspaper operations in Canada into an associate company.

 The move means contributions from its media business in Canada no longer are consolidated into group turnover.

 Sing Tao's printing division also did badly, with turnover sliding almost $90 million. Property operations, mainly in Canada, were hit by a decline in apartments available for sale. Turnover fell by $75.7 million.

 Sing Tao shares have lost 23 per cent since they resumed trading on Monday after confirmation of the stake sale.

 They closed at 85 cents yesterday, a 29 per cent discount to CEDF's offered price of $1.20 a share.

 A CEDF spokesman yesterday said it would not comment on rumours about the deal.

 Ms Aw ultimately will hold about 17 per cent of Sing Tao if CEDF's management exercises an option to buy a further 10 per cent stake.

 Mr Shridharani described terms of the share sale as 'a most disappointing transaction'.

 'We believe there is intrinsic value in Sing Tao that can more likely be realised with Ms Aw's departure from the scene.

 'We do not see what value the buyer brings to Sing Tao's core operations.' 



Sing Tao slides into $13.79m interim loss