SingPost acquisitions led to 25% turnover increase last year
Singapore Post achieved a 24.6% growth in its revenue in its latest financial year on the backs of acquisitions and the soaring popularity of e-commerce. The company said its full year results jumped from S$658.8m ($527m USD) to $821.1m ($657m USD) in the 12 months up to the end of March. The Group’s organic revenue growth, excluding the impact of new subsidiaries, was 3% year-on-year.
Profits during the year rose by 4.8% to S$143.1m ($114.5m USD).
However, despite the growth, the company warned that its performance is under increasing pressure from the decline of domestic mail volumes and increasing labour costs.
Mail volume fell for a second consecutive year, as SingPost faced similar trends to the rest of the global postal industry. Volume was down 1.3% compared to the 2012/13 year, although mail revenue for the full year rose 11.5% year-on-year, to S$491m ($393m USD), thanks to e-commerce growth and acquisitions like the direct mail firm Samplestore.
SingPost’s logistics revenue grew by 52.8% during the full year, to S$368.5m ($295m USD), again impacted by acquisitions such as the General Storage Company and Famous Holdings.
The Group’s Retail and e-Commerce division grew its revenue by 3.5% to S$86.7m ($69.4m USD), driven by e-commerce sales and financial services growth including a, 18.7% year-on-year growth in the fourth quarter, despite the sale of SingPost’s e-commerce business Clout Shoppe that quarter.
SingPost also saw growth in its property arm during the year, of 4.6% to S$44.9m ($35.9m USD), despite a dip in sales in the fourth quarter.
Group expenses rose 26.4%, largely as a result of acquisitions and investment in the transformation of the company in light of mail industry trends.
“Challenging”
Dr Wolfgang Baier, the SingPost Group chief executive, said the fourth quarter had been “challenging” for his company owing to the mail volume decline and escalating labour costs.
The rising labour costs were the result of the company’s SingPost Inclusivity Fund, announced last February as a way to help lower income postal staff.
“Frontliners such as postmen received a significantly higher wage increase of 6% compared to the 1.2% industry average last year,” he explained. “This year we are expecting to provide for more than a 3% increase, to further boost the income of our low-wage workers.”
Baier said his company was also under pressure from rising terminal dues payments — the payments to other national posts to cover final delivery of outbound international mail — which has been increasing at 6% year-on-year under the Universal Postal Union’s framework.
SingPost has been transforming itself under a strategy seeking to reduce reliance on the traditional postal business and the domestic market, and build on future growth in e-commerce and regional shipping.
“We are glad that the growth in regional e-commerce business, especially transshipment, has helped mitigate the decline in traditional postal business,” the SingPost chief said. “We will continue to diligently implement measures including productivity and operations optimization to manage costs.”
SingPost is planning S$100m ($80m USD) in investment to boost its mail sorting technology, its network of self-service parcel terminals, and in its fleet.
The firm said its transformation was driving innovation, productivity and customer service will meeting the changing customer needs.
Woo Keng Leong, the SingPost head of postal services, said about 60% of the S$100m investment is going into the domestic mail infrastructure and network, “including an advanced mail sorting system, which is more efficient, a fleet of bigger-capacity three-wheelers, which is also safer for the postmen and modernised, more convenient post offices with 24/7 auto-lobbies providing all day access to key services”.
“We are already running tests and pilots for all these service measures and will roll them out progressively,” he said.
