KUALA LUMPUR (July 27): Media Chinese International Ltd (MCIL) non-executive chairman Datuk Seri Dr Tiong Ik King said the Covid-19 pandemic has put the group in the unusual position of having the audience that the newspaper publisher has always targeted, but without the revenue from advertisers, who scaled back their advertising budgets.
Dr Tiong said in MCIL's latest annual report, which was filed with Bursa Malaysia today, that 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.
"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," he said.
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, said Dr Tiong.
To leverage the growth of online media consumption, MCIL's strategy remains to grow its digital audiences while protecting its core business revenue and profit, he said.
"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," he said.
According to MCIL's website, newspapers published by the group include Sin Chew Daily in Malaysia and Ming Pao Daily News in Hong Kong.
MCIL shares are listed in Malaysia and Hong Kong. On Wednesday (July 22), MCIL filed a profit warning with Bursa Malaysia and The Stock Exchange of Hong Kong Ltd.
MCIL said based on the information currently available which is subject to further review, the group expects to record a loss attributable to the owners of the company in the range of approximately US$5.6 million (about RM23.81 million) to US$6.2 million for the first quarter ended June 30, 2020 (1QFY20) compared with a profit of US$2.26 million a year earlier.
"The information contained in this announcement is only based on preliminary assessment by the board on the currently available information.
"Detailed financial information and performance of the group will be disclosed in the company’s unaudited consolidated financial results announcement for the 1QFY20, which is expected to be published in August 2020," MCIL said.
At Bursa today, MCIL's share price closed down 0.5 sen or 3.23% at 15 sen at 5pm, valuing the group at RM253.09 million. A total of 3.6 million shares were transacted.