SingPost acquisitions to continue as latest quarter brings “steady growth”
SingPost has seen revenue and profits growing by more than 7% in its latest quarter, despite the ongoing decline of mail volumes. Singapore’s postal service said this week that it made S$239.6m in the three months up to the end of December, up 7.6% on this time last year, with net profit coming in at S$42.2m, up 7.3%.
It means in the year to date, SingPost generated S$670.9m in revenue, up 6.9% year-on-year, and S$119.1m in net profit, up 6% year-on-year.
The company said the “steady” growth was driven by its logistics operations and e-commerce-related businesses, which offset the decline in traditional mail revenue.
Mail revenue fell 2.3% year-on-year in the third quarter, to S$130.1m, while logistics revenue grew 20.7% to S$122.1m.
The company’s retail and its own e-commerce activities saw revenue growing marginally to S$22.9m.
Lim Ho Kee, the SingPost chairman, said it was “critical” to continue transforming the company, despite the more balanced portfolio it has gained since transformation efforts began back in 2003, when the company floated.
SingPost’s operational expenses grew 8% year-on-year in the quarter, to S$199.1m, thanks to transformation costs and rising labour costs.
Excluding one-off impacts, the company said its underlying net profit in the quarter was S$42.4m, a 5.4% increase from the previous year.
Within the mail business, international mail saw its revenue decline at a steeper rate than domestic mail, as a result of changes to the Universal Postal Union’s payment system for international mail, known as terminal dues. SingPost’s international mail revenue dropped 2.7% in the quarter, with domestic mail revenue down 1.7%.
Wolfgang Baier, the Group Chief Executive Officer of SingPost, said: “Despite the declining Mail business, we are investing in service quality and focusing on efficiency and productivity improvements. We remain committed to provide our Singapore customers a better service experience as we take our public service obligations very seriously.
“The new integrated sorting machines costing S$45 million are now fully operational. These new machines increase letter sorting capacity by 17% and mechanisation rate to 95%, improving efficiency and accuracy at the same time. We will continue to transform our post office network into 24/7 touch-points with digital solutions for the convenience of our customers.”
SingPost has been continuing to build its e-commerce business and regional logistics capabilities through acquisition, acquiring Australian small parcel delivery business CouriersPlease in December and the Famous Pacific Shipping NZ forwarding business last month.
The company said it will continue to explore similar investment opportunities in the Asia Pacific region.
“We will continue to drive the Group’s transformation, focusing on strategic investments in infrastructure, technology, operations and talent,” concluded Baier.
