SingPost Q4 profit down 51.6% at S$38.5m
Singapore
SINGAPORE Post (SingPost) on Tuesday posted a 51.6 per cent fall in net profit from S$79.6 million a year ago to S$38.5 million for its fourth quarter ended March 31, 2015.
The decrease was due to SingPost changing its accounting policy for investment properties from the cost model to the fair value model to improve transparency of its asset value, starting from Q4. Net profit now includes fair value reporting of investment properties; fair value gains for the quarter fell from S$44.5 million a year ago to S$5.2 million.
Underlying net profit, or earnings from business operations which excludes the fair value gains and other one-off items, grew 14.9 per cent to S$41.1 million for the quarter. Revenue rose 28.7 per cent to S$248.7 million, boosted by SingPost's e-commerce and logistics businesses as well as contributions from new acquisitions.
Logistics was the strongest performing business segment by revenue for the year, growing 26.1 per cent to S$464.8 million. Revenue from retail and e-commerce rose 6.2 per cent to S$92 million, while SingPost's traditional mail business recorded a 1.9 per cent rise in revenue to S$500.3 million. Rental and property-related income declined marginally by 2.3 per cent to S$43.9 million.
Wolfgang Baier, SingPost's group chief executive officer, said: "These results demonstrate how our efforts to transform ourselves into an ecommerce logistics leader are progressing." The healthy growth rate of the logistics business will cushion the group's declining mail revenues, Dr Baier added.
The group's traditional postal business faces continued challenges, such as declining volumes, rising operating costs in domestic mail, and increased competition in the international trans-shipment business.
Total expenses for the quarter increased 33.9 per cent from S$165.6 million to S$221.7 million, due to the inclusion of new subsidiaries, rising business costs and initiatives to transform the group into a regional e-commerce logistics operator.
On a full-year basis, net profit fell 17.9 per cent to S$157.6 million. Revenue rose 12 per cent to S$919.6 million - a record high for SingPost. Full-year underlying net profit grew 5.2 per cent to S$157.2 million.
In its shift away from traditional mail to logistics and e-commerce, SingPost increased its investment over the course of the financial year. It invested S$224.2 million in acquisitions to expand its regional network, its new Regional eCommerce Logistics Hub, additional POPStations to strengthen its parcel business, and new mail sorting equipment to improve the service quality of its Singapore mail operations. The group expects to see the benefits of these investments in the coming years.
Mergers and acquisitions will continue to be part of the group's growth strategy to build scale and secure its "first-mover advantage".
Earnings per share were 1.625 Singapore cents and 6.849 cents for Q4 and the full year respectively, against 3.988 cents and 9.321 cents a year ago. The group recommended a final dividend of 2.5 cents per share, unchanged from a year ago.
SingPost shares closed at S$1.915, up 1.5 cents, on Monday before results were released.
