Singapore Post Q3 Profit Slips 5%

Singapore’s dominant postal services group, Singapore Post Ltd (SPOS.SI), said on Monday third-quarter profit was down 4.9 percent against the same period a year ago, which had been boosted by an asset sale. SingPost, a 31 percent-owned unit of Singapore Telecommunications Ltd (TELE.SI) , said net profit was SD27.6 million (D16.24 million) for the three months ended December 31, against SD29 million a year earlier. Profit for the December quarter was up from the SD24.19 million profit posted for the July to September period. “The core business performance was stable and contributions from our associated and joint venture companies had improved,” SingPost said in a results statement. The decline in the quarterly results was due to a one-off gain of SD1.2 million from the sale of a property last year and an expected increase of SD1.1 million in net finance costs from its SD684 million initial public offering in May, it added. Operating revenue was flat at SD97.4 million, compared with S$98.1 million in the quarter a year earlier, as growth in domestic mail revenues offset a fall in international mail revenues. Looking ahead, SingPost said results for the final six months of its financial year ending March are expected to be betthalf, due to a “progressive recovery” in the last few months of 2003 as Singapore recovered from the SARS outbreak. SingPost, with a 95 percent share of Singapore’s postal services market, announced its first postage hike in eight years in December, raising domestic rates by up to 4.54 percent in February. The firm, which has a monopoly in the provision of domestic and international letter and postcard services in the city state until 2007, justified the increase by citing a hike in consumer tax to five percent from four percent this month. The revision would have a minimal net revenue increase of SD400,000, as it is meant only to cover the consumer tax increase, it added. “Our financial performance and cash resources will continue to support the proposed net dividends of SD80 million for FY2003/04,” the company said. The interim dividend of S$40 million was paid last week and the proposed final $40 million dividend will be paid in August. SingPost shares, which closed at S$0.67 on Monday ahead of the results, have risen 12 percent from their issue price of 60 Singapore cents. The stock is down 2.9 percent from the start of the year, underperforming the key Straits Times index’s rise of 7.1 percent over the same period.