SingPost e-commerce investments paying off, further acquisitions likely
Singapore Post has hailed the success of its transformation programme after a year in which revenue grew 12%, and said yesterday that its innovation “will only intensify” to capitalize on the global growth in e-commerce. The company has been working to counter the impact of declining domestic letter volumes by diversifying its revenues and turning itself into an e-commerce logistics powerhouse for the Asia Pacific region.
Last year revenue grew to S$919.5m ($695.4m USD) in the 12 months up to the end of March 2015.
Growth stemmed from the region’s booming e-commerce industry, but also SingPost’s series of recent acquisitions.
The company had a strong final quarter of the year when revenue grew 28.7% compared to the same period a year before, to S$248.7m ($188m USD), with the quarter’s underlying profit up 14.9% year-on-year to S$41.1m ($31m USD).
The year saw SingPost investing S$224.2m ($169.5m USD) in its e-commerce logistics business, along with acquisitions and its mail infrastructure.
Changes in the company’s accounting procedures for its investment properties meant overall net profit for the year was down by 17.9% on the prior year, but the underlying net profit discounting this impact was up 5.2% year-on-year to S$157.2m ($118.9m USD).
SingPost said after investing in acquisitions, its new Regional eCommerce logistics hub and an expansion in its parcel locker network, along with continued improvements in its domestic mail sorting system, it is expecting to see further growth in years ahead.
Further acquisitions are also likely, the firm said, as it looks to build scale and secure “first-mover advantage” in the industry.
Dr Wolfgang Baier, the SingPost chief executive, said: “The pace of innovation driven by global ecommerce mega-trends will only intensify. By building our international network and transforming the mindset of everyone at SingPost is how we will create long-term value for our customers and our shareholders.”
Divisions
SingPost saw its logistics business grow its revenue by 26.1% year-on-year in 2014/15, to S464.8m ($351.5m USD). The full-year operating profit for the Logistics division was up 52% to S$21.5m ($16.3m USD).
Retail and eCommerce division, which includes sales from post offices and SingPost’s own e-commerce sales, grew revenue 6.2% in the year, to S$92m ($69.6m USD). Operating profit rose 29% to S$9.7m ($7.3m USD).
The company’s Mail segment grew only 1.9% year-on-year but remained an important part of the Group turnover, achieving revenue of S$500.3m ($378,3m USD). However, the segment’s operating profit was flat compared to the prior year, on S$144m ($108.9m USD).
Dr Baier said of the results: “Our logistics business has grown 26.1% year-on-year and such healthy rates of growth will cushion our declining mail revenues.
“We are going to keep up our investments to build our regional network and ecommerce capability and by doing this, we are reinventing ourselves. Our roots in mail and parcels give us the advantage of being able to sustain high service standards. This puts us where we can serve the needs of tomorrow’s customers in the fast moving world of ecommerce and online transactions.”
