Dear Shareholders,

2019/2020 was undoubtedly a challenging year for the Group as its financial performance was impacted greatly by adverse economic conditions in the key markets in which the Group operates.

 

Hong Kong’s economy for the first half of 2019 had been weakened by the trade war between China and the USA, the situation was further dampened by the social unrest which started in June 2019 and lasted till December 2019.

 

Then came the unprecedented COVID-19 pandemic which has brought the world to a standstill since January this year, with many countries closing their borders and implementing lockdowns to control the spread of the virus. These measures have sent the world economy spiralling down, with business closures and rising unemployment.

 

The Movement Control Order implemented in Malaysia since 18 March 2020 has severely disrupted our business operations by impeding our ability to deliver products and services to our customers. Our advertising and events revenues in Malaysia have also plummeted as a result of widespread business closures and the social distancing measures.

 

The tourism industry is one of the hardest hit by the COVID-19 outbreak, as countries imposed travel restrictions and lockdowns which brought the industry to a complete halt. Our travel business has been inevitably affected by this unprecedented pandemic and has had all its tour bookings cancelled since the lockdown began in March 2020.


FINANCIAL RESULTS

The Group’s turnover for 2019/2020 fell by US$46.3 million or 16.2% to US$239.2 million as its operations were impacted by the volatile business environment and the virus pandemic.

 

The Group delivered a profit before income tax of US$9,283,000 for the year ended 31 March 2020, as against last year’s loss before income tax of US$6,537,000. However, excluding the provisions for impairment of goodwill and certain plant and machinery totaling US$17,977,000 made in last year, current year’s profit before income tax would have been 18.0% below last year’s result. This weaker performance was mainly attributed to the decline in turnover from all the Group’s business segments, partially cushioned by cost savings.

 

Earnings per share was US0.42 cents per share for the year ended 31 March 2020.

 

As of 31 March 2020, the Group’s net assets stood at US$162,153,000 which was 3.3% lower than the previous year’s US$167,759,000. The Group’s net gearing ratio was zero as at 31 March 2020.

 


CONTENT REMAINS KING

We are operating in unprecedented and uncertain times.

 

There are serious causes for concern that media business models are collapsing as the global economic shutdown has severely reduced the advertising spending that both print and digital media depend on. Many newspapers around the world have stopped printing or transformed to a digital-only operation that is just as vulnerable to the whims of advertisers.

 

The COVID-19 pandemic has put the Group in the unusual position of having the audiences that we have always targeted, but without the revenue from the advertisers who scaled back their advertising budgets.

 

At times of crisis, fake news and misinformation tend to flood the social media. More and more people have come to realise that they need highquality and factual information to navigate the crisis. As such, this is the time to focus and grow our core audience, when readers are most in need of reliable information.

 

The Group’s newspaper titles and news websites have been vigorously publishing fact-checked articles, opinion pieces, in-depth analytical reports and short video capsules since the COVID-19 crisis began. Through these efforts, we are seeing growth in our audience reach and exposure.

 

The COVID-19 has caused readers to focus very intently on local news and information, and because of the social distancing measures, more people stay indoors. This leads to a change in media consumption habits, with surges in online news and content consumption.

 

The Chinese community in Malaysia is turning to our websites and apps for reliable and up-to-date information on the pandemic. April 2020 represented a full month of impact from the lockdown and saw the views of the Malaysian Operations’ websites and apps grow to more than 518 million for its coronavirus stories and videos, up 46% as compared to the same month last year. This will provide strong foundations for future progress.

 

We will continue to stay ahead of what our audience wants, and disseminate critical information to keep people safe and informed as daily life adapts to lockdown and lengthy quarantine.

 

Our journalists have withstood tear gas, petrol bombs, dangerous confrontations and exposure to deadly diseases to create quality, independent and trusted journalism that readers value.


LOOKING AHEAD

Besides affecting people’s health, COVID-19 has significant impacts on the economy and business environment. With the global economy expected to remain in contractionary state in the first half of 2020, it will be an extremely tough business environment for the Group in the coming months. Our Group will have to adapt to survive the onslaught of the invisible enemy and be ready to operate amidst such challenging conditions.

 

In order to prepare for the inevitability of a different working world post COVID-19, the Group will monitor and assess the economic conditions and business impact and respond accordingly.

 

To leverage on the growth of online media consumption, our strategy remains to grow our digital audiences whilst protecting our core business revenue and profit.

 

The Group will review its strategies and operations to adapt to the new economic ecosystem created by the pandemic where the way people consume information and make purchase decisions will be impacted by the changes in their current lifestyle. The Group will also review the way it operates to integrate “social distancing” to ensure its employees and customers stay safe.

 

Meanwhile, we are actively taking measures to reduce costs and manage our cash flows to ensure the sustainability of our businesses during the COVID-19 crisis and beyond. The stimulus packages introduced by the Malaysian, Hong Kong and Canadian governments to help ease the burden of individuals and businesses will be of some relief to our businesses.


CORPORATE GOVERNANCE & SUSTAINABILITY

The Board is committed to practising high standards of corporate governance and integrating 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.


DIVIDENDS

The Board has declared an interim dividend in lieu of final dividend of US0.10 cents per ordinary share payable on 30 July 2020. Together with the first interim dividend of US0.16 cents paid on 30 December 2019, the Group had declared a total of US0.26 cents per ordinary share for the financial year 2019/2020. This represents a dividend pay-out ratio of about 62.2% of the profit attributable to owners of the Company and a dividend yield of 6.6% based on the Company’s closing share price on 31 March 2020.


APPRECIATION

As the world grapples with the chaos and disruption caused by the COVID-19 pandemic, not only to our daily lives but also to the world economy, our Group too suffers from the adverse impact of the struggling economies in the countries where we operate.

 

Hence, 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 who have continued to show their support and trust in the Group during these difficult times.

 

I also wish to thank our management and staff for their dedication and contribution in helping our Group steer through these challenging times.

 

Lastly, on behalf of the Group, I wish to thank all our “healthcare heroes” and frontliners who have dedicated themselves to help fight the invisible enemy, COVID-19. These “healthcare heroes” have shown tireless commitment and have put their lives on the line in the ongoing fight against COVID-19. We salute their commitment and courage. We urge the public to stand together and support them in their fight in order to win the battle against this invisible enemy.


Dato’ Sri Dr TIONG Ik King

Non-executive Chairman
24 June 2020