SingPost back in the black with H1 earnings of S$11.5 million

SINGAPORE Post : S08 0% (SingPost) is back in the black with a net profit of S$11.5 million for the fiscal first half ended Sep 30, from a net loss of S$9.9 million a year before.

The better performance was despite a fall in revenue. The net profit was driven by lower volume-related expenses and operating expenses, as well as a smaller loss on exceptional items.

The logistics business in Australia and the international cross-border business also boosted the results, said the group on Thursday (Nov 2).

Earnings per share for H1 stood at S$0.0027, compared with a loss per share of S$0.0068 for the previous corresponding period.

SingPost posted a 13.7 per cent year-on-year fall in H1 revenue to S$827.3 million from S$958.9 million the previous year. The decline was mainly due to the “normalising of sea freight rates and volumes post pandemic, as well as foreign exchange impact”.

With about 85 per cent of the revenue generated internationally, the group is highly exposed to the risks of foreign currency depreciation.

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It highlighted the importance of leveraging the momentum of the international cross-border e-commerce logistics business, and said that the business has been focusing on trade lanes from Hong Kong to Australia and South-east Asia, as well as Europe to Asia, to acquire new customers.

Vincent Phang, SingPost’s group chief executive officer, said: “Our diversified portfolio and global presence, including our expanded operations in Australia, have enabled us to demonstrate resilience in the current uncertain global economic climate despite adverse currency movements.”

However, its domestic postal business continued to incur a loss in H1 because of declining mail volumes and rising inflationary costs, particularly in operating fixed infrastructure such as the post office network.

“SingPost has raised domestic postage rates by S$0.20 from Oct 9, which is expected to improve the domestic business in H2,” said the Republic’s postal service provider.

The group added that it is in discussions with the authorities to review the domestic postal business model, and develop a framework to ensure commercial viability.

“The board has advanced in the strategic review to enable the group and its individual businesses to be valued appropriately,” Phang added.

The weaknesses of Singapore’s postal market translated into a deeper loss in its post and parcel business to S$10 million from S$8.2 million.

The logistics segment registered a 19.2 per cent decline in operating profit at S$33.6 million, which the group attributed to lower freight forwarding profit from Famous Holdings, in tandem with the faltering sea freight outlook.

The operating profit of its property segment was, however, up 14 per cent to S$21.4 million. This was driven by positive rental reversions at SingPost Centre, with higher overall occupancy rate, said the group.

Overall, the group’s operating profit declined 24 per cent to S$31.4 million from S$41.3 million.

For the half year ended September, the board has declared an interim dividend of S$0.0018 per ordinary share. The group declared the same amount for the first half of the previous fiscal year.

The dividends will be paid on Nov 30, after books closure on Nov 17.

SingPost’s shares closed 2.2 per cent or S$0.01 higher at S$0.46 on Thursday.