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SingPost back in the black in Q4 on absence of impairment fees

But earnings continue to sag on poorer postal margins and e-commerce losses


SINGAPORE Post (SingPost) bounced back into the black in the fourth quarter after hefty impairments the year before, but underlying earnings still saw a slump.

Net profit was S$23.95 million for the three months to March 31, according to unaudited results released on Friday morning. This marked a recovery from the prior S$65.25 million loss.

Group revenue climbed by 13.5 per cent year-on-year to S$367.5 million on the back of e-commerce gains in the postal and logistics segments.

Turnover was up in those two divisions, as well as in the e-commerce segment, and cross-border e-commerce deliveries - especially from Chinese giant Alibaba Group - helped to prop up international mail revenue against the decline in domestic post.

With exceptional items out of the picture, though, SingPost's underlying net profit slid 28.6 per cent to S$15.27 million against S$21.37 million previously, amid higher corporate overheads and weaker postal earnings.

Operating losses in the fledgling e-commerce segment narrowed to S$5.85 million from S$15.1 million before, even as the struggling TradeGlobal unit posted revenue growth from new customer acquisition.

The purchase of Cincinnati-based TradeGlobal - which sparked due diligence concerns and a corporate governance scandal - was a major factor behind last year's fourth-quarter impairment charge of S$208.6 million.

Group chief executive Paul Coutts said in a statement that SingPost is still building on its tie-up with Alibaba. "We are integrating and scaling our e-commerce businesses in the United States and South-east Asia, as well as the rest of our overseas operations, and optimising the cost structure of the SingPost group," he added.

Maybank Kim Eng analysts Neel Sinha and Lai Gene Lih wrote in a report: "We believe the partnership with Alibaba holds a lot more volume upside as the currently low levels of retail e-commerce in Asean ramp up."

They added that "efforts at improving synergy and cost management (are) bearing fruit", noting that TradeGlobal's losses have been "narrowing significantly in the past two quarters".

Earnings per share was 0.9 Singapore cent, from an earlier loss of 3.03 Singapore cents. The

board proposed a final dividend of two Singapore cents a share, bringing the full-year payout to 3.5 Singapore cents, or 76 per cent of underlying net profit. Net profit for the full year more than trebled, to S$126.4 million, on an 8.6 per cent swell in revenue to S$1.46 billion. Ahead of an analyst briefing, OCBC's Low Pei Han stuck to a "buy" call on the stock. She noted that full-year earnings beat consensus and said that the final dividend was "in line with our expectations".

SingPost closed up by S$0.03, or 2.26 per cent, to S$1.36 on 15.84 million shares, after the results.

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