SingPost profits down in 2011 in weaker Asian economy
SingPost saw its group revenues increasing by 2.2% last year, as growth in its logistics and retail operations countered declining sales in its traditional postal services, but inflationary costs and investments ate into profits for 2011. Singapore’s postal operator issued its fourth quarter and full-year results today, with the three months ending 31 2012 hitting the year’s profits thanks to a slowing regional economy.
SingPost’s full-year revenue grew 2.2% to S$578.5m, but net profit fell 11.8% to S$142m as domestic mail volumes fell and the company continued its investment in areas of its business with good potential for growth.
The drop in profits was exacerbated by a weaker fourth quarter in which net profits were down compared to the same quarter last year by 17.4%.
During the fourth quarter, mail division revenues were “steady” at S$96.4m for the three months, as growing international mail and philatelic revenues offset declines in domestic mail and hybrid mail income.
Revenues in the logistics and retail divisions, however, grew strongly thanks to non-traditional services like e-fulfilment, e-commerce and financial services.
The year as a whole saw a similar picture with flat growth in mail revenue as growth in international mail, hybrid mail and philatelic services countered declines in domestic mail revenues. The SingPost Logistics division saw good growth over the year, while the retail division saw growth thanks to financial services and the new Internet shopping portal Clout Shoppe.
Logistics revenue grew 8.2% in the fourth quarter and 8.6% across the full year, to S$215.3m for 2011 as a whole.
Retail revenue grew 9.2% for the finl quarter and 3.8% over the whole year to S$69.4m for 2011.
Dr Wolfgang Baier, the SingPost Group chief executive officer said a weaker business environment and inflationary cost pressures had hit growth during the fourth quarter.
Baier said there was a slowdown in domestic mail and cross-border mail under subsidiary Quantium Solutions during the most recent three months reported. “In spite of that, our Logistics and Retail and financial services managed to grow through contributions from non-traditional revenue streams,” he said.
The SingPost said the year as a whole had proven a “difficult” year for the postal industry with continuing e-substitution, a slower economy and inflationary pressures in a “tight” labour market.
“However, we saw opportunity for growth in e-commerce, e-fulfilment and regional logistics,” he said. “The rise in e-commerce activities locally and in Asia has been promising and to tap this growing market, we have to respond and step up our investments to be ready for the future.”
SingPost stepped up its transformation programme in the 2011 financial year, concentrating on five key business areas – mail, digital services, logistics, e-commerce and retail/financial services.
Baier said 2011 had been a “watershed year” for his company in its investment activity.
“During the year, we invested in capabilities and resources in areas such as people, IT and operations, and the results – revenue growth in our non-postal business namely Logistics and Retail, in spite of challenging conditions – show that we are on the right track.”
