Synagie reverses from loss to post S$4.1m H1 profit on higher e-commerce activity

SYNAGIE Corporation has posted its first net profit since its initial public offering in August 2018 as a result of a surge in e-commerce activity during the Covid-19 pandemic. The company was S$4.1 million in the black for the half-year ended June 30, 2020, reversing from a loss of S$3.7 million a year ago.

Revenue increased 325.6 per cent to S$38.3 million, while gross profit jumped 411.9 per cent to S$12.9 million.

A surge in demand for products related to Covid-19 and higher e-commerce activity due to stay-home measures caused revenue from the e-commerce segment to rise 435.3 per cent.

The insurtech segment posted a 55 per cent, or S$1 million, fall in revenue. The uncertainty over the pandemic led to slow contract renewals.

Synagie's net profit comes as the group is proposing to dispose of its e-commerce business for about S$61.7 million to focus on its insurtech business. The sale, which involves the entire e-commerce, e-commerce enabler and logistics business, will be to a consortium of investors that include Synagie's three founders, Alibaba Singapore and a fund managed by venture capital firm Gobi Partners Group.

The board believes that the proposed disposal will enable the group to realise value for its e-commerce business without exposure to future market risks. It said the surge in revenue from this segment in H1 was due to one-off demand. Synagie expects revenue to normalise over the next few months.

The group's gross profit margin was higher at 33.7 per cent for the half year, compared with 28 per cent a year ago. This was mainly due to an improved product mix in the e-commerce segment. Synagie had also achieved its revenue targets, allowing it to earn the target incentives.

Earnings per share was 1.36 Singapore cents, compared with a loss per share of 1.43 cents a year ago.

The counter closed at 19.3 Singapore cents on Thursday, up 0.1 cent or 0.52 per cent.