SingPost posts Q4 net profit of S$7.2m on absence of impairment

SINGAPORE Post delivered earnings of S$7.2 million for the fourth quarter ended March, reversing losses booked in the corresponding quarter a year ago due to S$100 million in impairment charges.

The better bottom line came on the absence of one-off impairment charges of the US e-commerce subsidiaries that have filed for voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code. SingPost has since de-consolidated its financials from the rest of the group, and no longer recognises profit or loss from these subsidiaries.

But the national postal service provider generated a lower top line at S$312.2 million for the three months, down 2.7 per cent year on year from S$320.7 million, SingPost announced the results in pre-trading on Friday.

The board has recommended a final dividend of 1.2 Singapore cents per share, less than the two cents given out in the year-ago period. Shareholder approval is needed for the dividend proposal at the annual general meeting, the date of which was not given in the results announcement.

SingPost has not been spared from the impact of the novel coronavirus pandemic.

Paul Coutts, SingPost's group CEO, said: "Since the start of 2020, Covid-19 has posed significant challenges to the operating environment for businesses across all industries, with major economies warning of job cuts and recession in the coming year. Despite the strong demand for logistics and delivery services, SingPost will not be spared from the economic fallout if Covid-19 persists, so we are focused on ensuring our cost base remains sustainable."

The mainboard-listed company's revenue from post and parcel was down 5.7 per cent in the quarter, while profit on operating activities in this segment tumbled 47.7 per cent.

Domestic letter mail volumes continued its double-digit decline for a second straight quarter, while international post and parcel saw a drop in its revenue and operating profit due to the disruption in global supply chains as a result of border control measures imposed by many countries due to the pandemic. As a result, profit on operating activities in the post and parcel segment dropped 47.7 per cent in the quarter.

Similarly, the absence of the impairment charges for the US businesses improved SingPost's financials in FY2020, as it posted S$91.1 million in net earnings, compared with S$19 million a year ago.

But revenue decreased 0.7 per cent to S$1.31 billion, as all segments recorded a slight decline in revenue.

SingPost shares shed 0.5 Singapore cent or 0.67 per cent to S$0.74 as at 10.05am on Friday after the results were announced.