2020 was a bleak year for nations and individuals across the globe. With the emergence of the COVID-19 virus, the year passed with people having to stay at home for most part of the year and operations disrupted for almost every business sector.
In Malaysia, movement control restrictions were implemented for most part of 2020 as a measure to control the spread of the coronavirus. This had a significant negative impact on the retail sector as most businesses had to close while work from home became a norm for many.
Hong Kong, which was recovering from the disruption caused by the protests held during most of the second half of 2019, has to once again face another predicament. Hong Kong, like many other countries, has to close its borders and implement strict social distancing measures to prevent the spread of the virus. These actions have significant impact on the city’s economy and have led to reduced economic activities, business closures and rise in unemployment.
This unprecedented pandemic has adversely affected all our operations especially our travel business as international travel plummeted to a new low. With the sharp decline in the global economy and closure of businesses, retail spending fell drastically and this has weakened advertisement spending and thus has exerted much pressure on our print and publishing business.
The businesses of the Group in all segments and markets it operated in have been badly hit by the COVID-19 pandemic.
The Group’s turnover for the year ended 31 March 2021 declined by 51.6% to US$115,679,000 from US$239,217,000 in the previous year, mainly due to the decline in turnover from the Group’s travel and print publishing businesses.
On the other hand, our digital business continued to register a healthy steady growth, thanks to our digital strategy and a change in consumer behaviour triggered by the pandemic.
The sharp revenue decline was cushioned by wage subsidies received from various governments as well as aggressive cost saving measures taken across all business units.
The Group recorded a loss before income tax of US$1,367,000 as opposed to a profit before income tax of US$9,283,000 in 2019/20.
Loss per share was US0.08 cents for the year ended 31 March 2021.
At 31 March 2021, the Group’s net assets stood at US$166,041,000 which was 2.4% higher than the previous year’s US$162,153,000 and the Group’s net gearing ratio was zero.
ADAPTING TO CONTINUOUS CHANGE
COVID-19 has presented challenges but it has also enabled us to re-position our business and accelerate transformation across all our operations.
Besides its social and economic impact, the pandemic has also accelerated the development of a digital economy. Strong secular shifts in online behaviour and changing consumption patterns are driving expectations for more online news and content consumption.
In that context, we believe that digital news and content will play a more important role going forward. As a leading Chinese media player in the industry, this provides a huge opportunity for us and we are constantly adapting our product development roadmap to further improve our offering and services, based on readers’ and users’ feedback and evolving needs.
Our Malaysian Operations’ websites and apps were reaching all-time highs in traffic and content during the lockdowns in March and April last year. This was an encouraging result of our efforts and we will continue to grow our digital audiences by delivering and engaging each customer with trusted news, information and content that is most relevant to their needs and interests.
In 2020, Google announced that it will join Apple and Mozilla in phasing out third-party cookies in its web browser by 2022. Currently, Google Chrome, Apple Safari, and Mozilla Firefox jointly take up about 87% of the global browser market. This move means that third-party cookies, which have driven the online advertising economy for the past two decades, will soon be consigned to internet history. Google predicted that when third-party cookies disappear, 60% of programmatic advertising revenue will go with them. Nevertheless, the death of the cookies will open up unique opportunities for content providers like us to reclaim a central role in the digital advertising ecosystem as publishers with direct and trusted relationships with our audiences.
As first-party data is critical in the digital environment both for subscriptions and targeted advertising, we took a major step in building our future with the promotion of digital registration for the Group’s newspaper websites and apps. Moving forward, we hope to use these data to fuel the growth of our digital subscription revenue streams and to enhance the value and performance of our digital audience to advertisers.
We have been managing our business prudently and effectively streamlining our business operations. The Group has also strengthened its financial position over time and is well positioned for recovery through the ongoing crisis of the pandemic and its economic repercussions.
In terms of health and safety, the Group has implemented measures to promote social distancing and the use of masks, and reduce social interaction to prevent the spread of COVID-19 in its offices. The Group also has put in place procedures such as staff rotation and emergency measures in case any employee is tested COVID-19 positive to ensure its operations can continue to run without the need to shut down.
We strive to minimise job losses in our businesses. The underlying financial strength of the Group enabled us to avoid staff retrenchment, although some headcount reduction was unavoidable at some of our businesses which were particularly affected by the COVID-19 pandemic.
The arrival of vaccines for COVID-19 brings a glimmer of hope to the world. With many countries embarking on vaccination programs, it seems that the re-opening of country borders and the resumption of international travel are edging closer to reality.
As such, the Group expects that business will slowly pick up in the new financial year, though it will still be far from full recovery.
CORPORATE GOVERNANCE & SUSTAINABILITY
The Board places great importance on practising high standards of corporate governance and embedding sustainability measures into its strategy and operations throughout the Group. Details of the Group’s corporate governance initiatives, risk management, internal control policies and sustainability efforts are set out in the relevant sections of this Annual Report.
The Board has declared an interim dividend in lieu of final dividend of US0.10 cents per ordinary share payable on 8 July 2021 for the financial year 2020/21. This represents a dividend yield of 2.1% based on the Company’s closing share price on 31 March 2021.
CHANGE IN BOARD ROOM
On behalf of the Board, I would like to thank Mr LEONG Chew Meng and Mr YU Hon To, David, who have resigned from the Board with effect on 1 July 2021. Mr LEONG was appointed as a non-executive director on 14 April 2008 and was re-designated as an executive director of the Company on 31 March 2013; while Mr YU has been an independent non-executive director of the Company since 30 March 1999. The Board would like to extend its appreciation to Mr LEONG and Mr YU for their dedication, commitment and contribution to the Company and the Board.
I would also like to welcome Mr WONG Khang Yen, Mr LIEW Sam Ngan, Ms TIONG Yijia and Mr IP Koon Wing, Ernest who will join the Board on 1 July 2021. I am confident that with their experience and relevant expertise, they will bring significant value to the Group.
It has been a year since the emergence of the COVID-19 virus and the past year has been a struggle for all individuals and businesses around the world. Our Group has not been spared and we have to adapt our operations to survive the economic downturn.
As such, I wish to express my sincere gratitude and appreciation on behalf of the Group to our shareholders, readers, viewers, advertisers, business partners, and other stakeholders for staying steadfastly during these difficult times with us.
I also wish to thank our management and staff for their continued dedication and contribution to our Group.
Dato’ Sri Dr TIONG Ik King
27 May 2021