Singapore Post fy net down 4percent
Singapore Post Ltd. have said their full-year net profit fell slightly, hurt by poor economic conditions at the start of the financial year.
The postal services company reported net profit of SD104.3 million for the year ended March, down 4percent from SD108.7 million the previous year.
Revenue for the year fell 1.3percent to SD368.2 million as mail volume slipped and demand for retail services weakened during the SARS outbreak from March to May 2003, and during the U.S.-led war in Iraq, Singapore Post said.
In the final quarter ended March, the postal operator reported a 10% increase in net profit to SD28.9 million, from SD26.2 million in the previous year.
“We are seeing positive growth potential in direct mail, logistics and retail, and will continue to pursue initiatives to grow these segments of our business, including financial services,” William Tan Soo Hock, Singapore Post’s chief executive said in the company statement.
Total domestic mail volume for the year rose 2.6percent to 719.3 million items from 701.1 million in the previous year, mainly due to higher volume of direct mail, better known as junk mail, the company said.
Singapore Post, which is 31percent-owned by Singapore Telecommunications Ltd. (S12.SG), said its mail operations accounted for 82percent of operating profit in the 2003-04 financial year.
Singapore Post reiterated it will give out a total of SD80 million in dividend for the 2003-04 financial year. The company had already given out half of that amount in January as interim dividend.
For the current financial year, Singapore Post plans to pay the same amount in dividend to its shareholders, Tan said at a press briefing held after the earnings announcement.
Earlier this year, Singapore Post announced plans to move into retail financial services, by offering unit trusts, insurance and small retail loans at some of its branches, starting in June. Initial investment is for this is around S$2 million.
Victor Ow, Singapore Post’s senior director of financial services, said talks with local and financial institutions to underwrite some of the financial products were progressing “as planned.” Ow wouldn’t disclose the names of the institutions.
Singapore Post will roll out pawnbroking services at two of its branches from June this year, while waiting for approval from financial regulator, the Monetary Authority of Singapore for a license to offer other services like insurance, he added.
Singapore Post, which operates 62 post offices in the city state, is hoping the combined share of its new financial services businesses and other retail operations will contribute 30percent of total revenue by 2009, while its postal services will account for the remaining 70percent.
The company’s net profit margin in the 2003-04 financial year slipped marginally to 28.3percent from 29.1percent in the previous financial year.
Capital expenditure in the 2003-2004 financial year slipped to SD7.8 million from SD12.2 million in the previous year. The company expects capex to be about 3percent to 5percent of its operating revenue in the current financial year.
Looking ahead, Singapore Post says it expects its “core business” performance to remain stable in the current year.
