SingPost reports record revenues and profit
Singapore Post has reported revenues of S$254.6m for the first quarter (Q1) of FY2015/16, which was an increase of more than 20% on last year. In its official statement issued today (29 July), SingPost said that operating profit was up 14.5% to S$57.7m, net profit rose 15.8% to S$46.6m and underlying net profit was S$40.3m (up 8%).
Turning to specifics, SingPost noted: “Mail revenue grew 1.6% to S$125.1m where the postage revision from October 2014 offset the effect of declining traditional mail volumes and the partial loss of revenue after the divestment of Novation Solutions and DataPost (HK) in the first quarter.
“SingPost is expected to record an estimated gain of above S$30 million from the divestment of Novation
Solutions and Datapost (HK), as well as DataPost (pending completion).”
Given the global trend for a decline in traditional mail volumes, SingPost’s performance in the mail sector is in line with expectations.
The company’s Logistics segment, which also includes SingPost’s eCommerce logistics business operations, turned in a strong performance, with a 43.6% jump in revenues to S$140.1 million.
“This growth along with the corresponding 74.6% improvement in operating profit from Logistics reflect both the growing demand for eCommerce logistics as well as SingPost’s progress in expanding its share in this growing market,” noted SingPost.
Total expenses for Q1 FY 2015/15 were up 24.9% to S$222.7m. SingPost explained: “The largest cost increase was for volume-related expenses due to higher international postal traffic and increased eCommerce-related deliveries. M&A related expenses also increased as SingPost continues to create long term shareholder value by focusing its resources to invest in eCommerce logistics, improving productivity in the customer facing processes and back office, as well as forging partnerships to diversify and expand its
overseas network.”
As previously reported by Post&Parcel, SingPost announced earlier this month that it will be expanding its e-commerce logistics cooperation with Alibaba (and, as part of the deal, the Chinese online retailer is increasing its equity stake in SingPost to 14.51%). In June, SingPost invested S$4.6m for a 30% stake in Hubbed, an Australian company which arranges parcel deliveries and returns using a national network of newsagents.
Commenting on the Q1 results, Dr Wolfgang Baier, SingPost’s Group Chief Executive Officer, said: “We have a set of numbers that demonstrates the progress we are making in the transformation of SingPost.
“This Quarter, our revenue and net profits are our highest ever.
“The partnerships we have built and the M&As we have done are showing in our numbers. We are adding one or two major ecommerce customers each month. Just three weeks ago, we announced that we have a new arrangement with Alibaba to create an end-to-end logistics platform around our reorganized subsidiary Quantium Solutions International. We will embark on a joint strategic business development framework with Alibaba and they are increasing their equity in us from 10.23% to 14.51%.”
