SingPost’s profits slip 5% as it invests to seek growth
Singapore Post has recorded a 5.2% drop in its profits during the third quarter of its 2011/12 fiscal year, compared to the same period three months previously. Issuing its latest unaudited results today, SingPost said overall its Group revenues saw a “marginal” increase of 0.6%, to S$149.4m for the three months up to the end of December 2011, but total expenses grew 3.6% to S$114.5m.
Net profit was therefore decreased year-on-year by S$2.2m to S$41.6m in the quarter.
During the first nine months of the fiscal year, revenue was up 1.9% to S$432.6m, with total costs up 5.6% to S$335.6m, leaving net profits down just over 10% to S$111.4m.
Explaining the figures, SingPost said part of the rising costs came from its investment policy, having spent S$2.7m upgrading IT, “talent” and operations to drive future growth. Labour costs were also up within a “tight” labour market, the company said.
During the third quarter, SingPost’s mail revenues dropped 3.4% to S$98m thanks to ongoing decline in domestic and international mail volumes.
The company’s logistics revenues rose by 5.2% to S$57m on the backs of growth in its Speedpost business and e-commerce fulfillment activities at its Quantum Solutions and vPOST shipping business.
Retail revenues grew by 5.1% to S$17.6m thanks to successes from new retail products and the Clout Shoppe online mall business.
“Strong foundation”
Dr Wolfgang Baier, the Group chief executive at SingPost, said his company’s performance was part of the industry’s global struggles in a “weakening” economy.
He said: “What’s in our favour is our strong foundation, which puts us in a good position to invest for growth. Over the past months, we have ben investing in the necessary capabilities and resources to drive our diversification and regionalisation efforts.”
Nevertheless, Baier added that while SingPost continues to invest to grow, cost management would remain “a key focus”.
“We are implementing cost management initiatives and focusing on spending only in areas that will drive our growth efforts,” he said.
SingPost’s investment programme is built on five core areas of its business – mail, digital services, logistics, e-commerce and retail/financial services.
The company is in the process of turning its Datapost subsidiary to become a regional outsourcing player as it also continues to develop its digital mailbox service to offer customers another option for their mail. A recent investment in Hong Kong business Novation will seek to strengthen its digital and hybrid services.
Elsewhere, 2011 has seen SingPost investing in regional businesses to build up its presence in South East Asia – particularly in parcels and e-commerce logistics.
Within its mail operations, SingPost invested in a new multi-purpose sorting machine in November, which it said today was able to process between 10,000 and 15,000 packages per hour, as the company responds to the changing profile of mail – more parcels, fewer letters.
SingPost said it has also been upgrading its track and trace capability and other IT systems to improve its customer service, while its airmail transit centre at the airport has been expanded to boost processing time and provide better service during the festive peak in volumes at the end of the year.
