SINGAPORE (May 11): Singapore Post (SingPost) recorded 4Q18 earnings of $23.9 million, compared to a loss of $65.2 million in 4Q17.
This brings FY18 earnings to $126.4 million, 278.4% higher than $33.4 million in FY17.
During the quarter, the group’s revenue increased by 13.5% to $367.5 million compared to $325.8 million a year ago, with growth from the Postal and Logistics segments.
In the Postal segment, revenue rose 18.2% y-o-y as strong growth in International mail revenue helped offset the decline in Domestic mail revenue.
In the Logistics segment, revenue increased 2.0% y-o-y, driven by higher last-mile eCommerce delivery volumes in Singapore and Australia for SP Parcels and Couriers Please respectively, as well as higher freight forwarding volumes for Famous Group.
However, the growth was partially offset by revenue decline at Quantium Solutions, which faced competitive pressures at its Hong Kong operations. This negated the improved performance for Quantium Solutions Singapore from higher utilisation at the Regional eCommerce Logistics Hub.
The group’s eCommerce segment saw revenue increase 15.7% y-o-y, while TradeGlobal saw revenue growth of 38.5% y-o-y.
Rental and property-related income was 58.1% higher y-o-y at $13.9 million, while Miscellaneous income was 72.1% lower y-o-y at $2.05 million. Together, these made up the group’s net other income and gains.
Total expenses for the quarter were 11.7% higher at $345.6 million from $317.5 million last year.
This was mainly due to a 22% y-o-y increase in volume-related expenses, as the group seeks to grow eCommerce volumes to benefit from economies of scale from operating leverage. The increase was due to higher International mail terminal dues and air conveyance expenses in line with higher volumes, as well as higher outsourced services mainly due to our US businesses.
Administrative and other expenses also increased by 12.6% y-o-y to $41.1 million, largely due to higher professional fees.
The group has declared a final dividend of 2.0 cents per share, which will be payable on July 31. This brings the total dividend for the financial year to 3.5 cents, representing a payout ratio of 76% of the group’s underlying net profit.
Paul Coutts, group CEO of SingPost says, “We continue to execute on our transformation and build on our partnership with Alibaba in eCommerce. We are integrating and scaling our eCommerce businesses in the US and Southeast Asia, as well as the rest of our overseas operations, and optimising the cost structure of the SingPost Group.”
“[On Quantium Solutions Hong Kong]: We expect the pressure to sustain and continue. We are in the process of reshaping the business and introducing new business streams that will give us more opportunities. We have been executing the new strategies in the past few months. It will take some time to come through. We have reviewed all customer contracts and renegotiated some of them. If we don’t get some of the terms that we need, we may exit some of them that are loss-making,” adds Coutts.
Shares in SingPost last traded at $1.33 on Thursday.
