SingPost: Our first-half results demonstrate the resilience across our businesses
SingPost’s first half underlying net profit was S$25.2 million, compared to S$13.4 million in 1H FY2023/24, boosted by the higher revenues.
Vincent Phang, Group CEO, SingPost, said, “Our first-half results demonstrate the resilience across our businesses, despite the challenging market conditions. We are focused on executing our strategic initiatives to maximise shareholder value.”
The Group’s operating profit increased by 62.9% YoY to S$51.2 million from S$31.4 million previously.
Business Segment Performance
Australia
Revenue of the Australia business increased by 44.1% YoY to S$574.9 million from S$398.9 million in the first half, while operating profit rose by 30.2% to S$30.4 million from S$23.3 million. The growth was largely due to the consolidation of Border Express following its acquisition in March 2024.
The organic performance of the Australia business was resilient in the face of challenging business conditions, with the industry experiencing economic headwinds and reduced volumes in both the B2B and B2C sectors. Its 4PL business pipeline remained strong in the first half with the addition of new customers.
International
International segment consists of the 1) international cross-border delivery business and warehousing services, and the 2) freight forwarding business.
1) International cross-border business
The International cross-border business continued to face a difficult business environment. It has focused on improving operational efficiency to manage margins and profitability. Revenue of the International cross-border business amounted to S$117.9 million, a decrease of 26.8% YoY from S$161.1 million while operating profit was S$4.3 million compared to S$3.0 million previously.
2) Freight forwarding business
Freight forwarding revenue increased by 9.7% YoY to S$148.7 million from S$135.6 million due to higher sea freight rates. However, operating profit declined by 29.2% to S$8.4 million from S$11.9 million previously due to significant cost escalation in sea freight rates leading to margin compression.
Singapore
The Singapore segment consists of the 1) Singapore postal and logistics business, and the 2) property leasing business comprising mainly SingPost Centre.
1) Singapore postal and logistics business
Revenue of the Singapore postal and logistics business amounted to S$129.6 million, an increase of 12.4% YoY from S$115.3 million. The improvement was due to higher revenue from the delivery business arising from the postage rate increase implemented in October 2023, which offset the continued decline in letter mail volume.
While the delivery business has improved significantly, profitability continues to be impacted by the post office network which remains unprofitable. There were also one-off costs for investments in technology capabilities and upgrades of legacy systems in the first half. The Singapore business recorded an operating loss of S$0.9 million compared to a loss of S$14.7 million previously.
The Group is finalising an operating model with the authorities to ensure the long-term commercial viability of postal services, focusing on the optimisation of consumer touchpoints and transition of select post office services to alternate touchpoints.
2) Property leasing
Property revenue amounted to S$43.0 million, an increase of 13.2% YoY from S$38.0 million, while Property operating profit rose 11.7% YoY to S$23.9 million from S$21.4 million. The improved performance was driven by higher rental income from SingPost Centre. Overall occupancy rate at SingPost Centre was 98.2% as at 30 September 2024 compared to 96.2% as at 31 March 2024.
Interim dividend
The Board of Directors has declared an interim dividend of 0.34 cents per ordinary share (tax exempt one-tier) for the half year ended 30 September 2024. This amounts to 30% of H1 FY2024/25 underlying net profit and an increase of 89% YoY.
