Singapore Post 1Q Net Profit Up 10.5%

Singapore Post Ltd. Monday reported a 10.5% rise in first quarter net profit to S$26.1 million, as revenue from its mail services remained steady amid a reduction in taxes and costs. Revenue for the three months ended June 30 came to S$89.4 million, a slight 0.5% decline from S$89.01 million a year earlier. Singapore’s dominant postal operator said it managed to reduce finance costs by swapping fixed interest rates on its bond issue for floating rates. It also paid less in taxes after the government reduced the corporate tax rate to 20% from 22% in the previous financial year. Singapore Post, which is 31% owned by Singapore Telecommunications Ltd. (S12.SG), also said it benefited from a change in accounting standards, which allowed it to cease amortizing goodwill of S$1 million per quarter. Revenue from SingPost’s mainstay mail division rose 1.4% on year to S$71 million, though revenue from its retail and logistic divisions slipped marginally to S$10.2 million and S$12.1 million, respectively. Earlier this year, SingPost announced plans to offer financial services, including pawnbroking, at some of the 62 post offices it operates in the city-state. In its earnings announcement, SingPost said the rollout of these new services is on schedule and costs remain within the S$2 million budget. The company opened its first pawnshop in May. SingPost said it expects the revamp of the commission structure at a European joint venture to have an impact on its second-half earnings and reduce full-year net profit between S$4.5 million and S$6.5 million. The JV, called Spring, is 51%-owned by the Netherlands’ TPG, 24.5% by the U.K.’s Royal Mail and 24.5% by SingPost. SingPost also said it expects to maintain and perhaps raise its dividend payout policy of S$80 million for the whole financial year. Looking ahead, SingPost reiterated it expects its “core business” performance to remain stable in the current year.”