SingPost expects higher parcel revenue with resumption of longer-haul flights

SINGAPORE Post’s e-commerce logistics segment was a bright spot in its latest financial results, although further recovery of its post and parcel segment would likely depend on the gradual resumption of longer-haul flights. 

The mainboard-listed postal services company posted a 188.1 per cent rise in net profit to S$48.1 million for the second half year ended Mar 31, 2022, from S$16.7 million in the year-ago period. Earnings per share rose to S$0.0186, from S$0.0041. 

The increase in net profit was primarily due to growth in e-commerce, which saw revenue grow 90.3 per cent to S$619 million. Overall group revenue increased 34 per cent to S$934.2 million. SingPost breaks its revenue down into 3 segments: its post and parcel segment declined 15 per cent to S$296.8 million, while the property segment fell 8.2 per cent to S$55.1 million. 

For the full year ended Mar 31, 2022, SingPost’s net profit climbed 74.5 per cent year on year to S$83.1 million from S$47.6 million. This translated to an EPS of S$0.0309 for FY2022, up from the group’s FY2021 EPS of S$0.0146. 

Excluding exceptional items, underlying net profit would have risen 53.1 per cent to S$43.9 million in H2 and 35.2 per cent to S$81.3 million for the full year.

Revenue rose 18.6 per cent on the year to S$1.7 billion from S$1.4 billion, following contributions from Freight Management Holdings (FMH). The latter became a SingPost subsidiary after the group increased its stake to 51 per cent in November 2021. 

At the company’s media briefing, group chief executive Vincent Phang said there is more room to build synergies between FMH, which is a fourth-party logistics player serving businesses, and CouriersPlease, its other Australian subsidiary that does last-mile deliveries to consumers.

Fourth-party logistics companies oversee the supply chains and logistics of their clients. 

“As our customers start to expect more omnichannel services, having a B2C (business-to-consumer) element attached to (FMH) will give customers choices, whether it’s delivery to a store or delivery to someone at home,” he said.

In Singapore, e-commerce logistics volume grew 19 per cent in H2. It accounted for 40 per cent of domestic revenue, up from 32 per cent last year.

But the e-commerce uptick seen during the pandemic is slowing down, Phang said, and there was “some pullback” in revenue generated from e-commerce logistics in the fourth quarter of last year. 

He sees the possibility of some moderation in e-commerce demand as the economy opens up, but added that the dip in Q4 was also partly a result of the high-base that the company saw a year ago. He also believes in the continued long-term growth of the segment.

On the other hand, the continued impact of Covid-19 on air freight capacity resulted in lower international post and parcel volumes.

”We really need some of the longer-haul flights and wider-bodied jets to start flying so we will see that, hopefully, recovering in the next couple of quarters,” Phang said.

The board has proposed a final dividend of S$0.013 per share, bringing the annual dividend for the financial year to S$0.018 per share. The record date and date payable will be announced at a later date. Shareholders received S$0.011 per share in dividend last year. 

SingPost shares were up S$0.01 or 1.4 per cent at S$0.705 as at 2.05 pm on Friday.