SingPost reports Q2 results
Singapore Post Limited (SingPost) has reported a 22.3% rise in revenues for the second quarter (Q2) – but a 27.9% drop in underlying net profit “due to transformational investments and challenges”. Revenues for the quarter were $321.7m and the underlying net profit was $27.1m.
SingPost said that “higher eCommerce expenses, costs related to the new Regional eCommerce Logistics Hub, loss of rental income from the redevelopment of SPC Mall, and decline in domestic mail” had impacted profits – but added that the “transformational investments” will “provide future sources of earnings”.
Mervyn Lim, Covering Group Chief Executive Officer, commented: “We are taking a long term view as we build scale for future profitability. While financial benefits will not be immediate, initiatives such as the Regional eCommerce Logistics Hub that was opened on 1 November 2016, as well as our deepening collaboration with Alibaba, will strengthen our eCommerce logistics network for future growth.”
Postal revenue was stable but operating profit declined 10.6%. Cross-border eCommerce-related deliveries rose, mitigating lower domestic letter mail volumes.
Logistics revenue slid 1.2% to S$154.1m, with lower contribution from non-eCommerce related activities amid a global economic downturn. Operating profit declined 35.6%, due to costs related to the completion of the new Regional eCommerce Logistics Hub, as well as pricing pressures in the eCommerce logistics space.
