SingPost sinks to S$75.1m Q4 loss on impairment charges for US units

MAINBOARD-listed mail and logistics firm SingPost sank into the red for the fiscal fourth-quarter, dragged down by impairment charges for two loss-making US e-commerce businesses up for sale.

For the three months ended March 31, net loss came in at S$75.1 million, reversing from a net profit of S$31.8 million a year ago.

This translated to a loss per share of 3.50 Singapore cents for the quarter, versus earnings per share of 1.24 Singapore cents previously.

Nonetheless, the board is recommending a final dividend of two Singapore cents, unchanged from the preceding year. The final dividend, if approved by shareholders at an annual general meeting, will be paid out on Aug 7, SingPost said. This would bring the annual dividend for the financial year to 3.5 Singapore cents per share.

Revenue for the fourth-quarter slipped 2.1 per cent to S$374.1 million, largely due to declines from its logistics and e-commerce business segments.

For the full-year, net profit plunged 86 per cent to S$19 million from S$135.5 million, which the group attributed mainly to impairment charges of S$98.7 million for its US businesses.

On a per share basis, earnings stood at 0.18 Singapore cent for the year, down from 5.32 Singapore cents a year earlier.

Full-year revenue rose 2.9 per cent to S$1.56 billion, led by growth from its post & parcel and property segments.

Excluding the impact of exceptional and other one-off items, underlying net profit declined 5.8 per cent to S$100.1 million for the full year, due largely to higher losses from the US businesses.

However, excluding the US businesses, underlying net profit would have closed 15.8 per cent higher for the year, SingPost noted.

Following a strategic review of its US business, its prospects and additional investments required, the group has decided to exit the US market, and put its US business up for sale. It also expects to continue accounting for operating losses on the US businesses until it completes its exit.

Noted group CEO Paul Coutts: "Despite our best efforts in turning the US business around, we faced increasingly intense challenges which impacted our performance. As a result, we made the difficult decision to commence the sale process for our US e-commerce business.

"We remain committed to our e-commerce business, as it remains a key part of our strategy towards future financial growth. The group's competitive advantage lies in Asia Pacific, where we are seeing the strongest growth in volumes and yields, and we will continue to refine our businesses to leverage the growth.

In the immediate term, we continue to focus on improving our operations in Singapore to better serve the needs of customers in our home market," Mr Coutts added.

SingPost shares closed at S$1.01 on Tuesday, down one cent.