Singapore Post (SingPost) yesterday unveiled higher profits for its first quarter ending 30 June2010 with strong mail and logistics growth and announced plans to diversify further into e-commerce
logistics and international expansion.The group’s revenue for the first quarter of FY 2010/11 increased 13.5% to S$138.2 million(€77.8 million). Growth was attributed to improved performance in the Mail and Logistics segmentsas well as the consolidation of Quantium Solutions for the full quarter compared to two months inthe same quarter last year.
Mail revenue increased 11.4% to S$95.7 million (€53.9 million), on higher domestic andinternational mail traffic. Domestic revenues rose 9% while international mail revenues soared by17.5%. The mail business improved its operating profit by 13.1% to S$36.2 million (€20.4million).
Logistics revenue recorded a 34.4% jump to S$46.3 million (€26.1 million), mainly attributableto the inclusion of Quantium Solutions and growth in transshipments and vPOST shipping. Speedpostrevenues dropped slightly by 0.8% but warehousing revenues grew nearly 38%. The division’soperating profit declined by 14.2% to $2.4 million (€1.3 million), however.
Retail revenue dipped 1.2% to S$16.3 million as lower contributions from agency and retailproducts offset the growth in financial services. Rental and property-related income recorded amarginal growth of 1.6% to S$10.1 million.
Total expenses for the Group rose 19.0% to S$103.1 million. This was due partly to theconsolidation of Quantium Solutions as well as higher expenses in labour and related costs and theeffect of reduced benefits from the Government’s Jobs Credit Scheme.
The Group’s net profit grew 3.2% to S$40.7 million (€22.9 million). Excluding one-off items,such as benefits from the Jobs Credit Scheme and amortisation of deferred gain on intellectualproperty rights, the underlying net profit rose a marginal 1.0% to S$37.3 million (€21million).
Ng Hin Lee, Deputy Group Chief Executive Officer of SingPost, said: “In spite of the challenginglandscape, particularly pressure from e-substitution and competition, we have managed to grow ourbusiness in the first quarter. We are seeing an increase in business activity, thanks to arecovering economy.”
He added: “As we continue with our transformation to remain globally relevant, we will focus ourefforts on diversification and growth. Our objective is to build a more balanced revenue andearnings portfolio by growing non-mail contributions and driving regional growth.”
“We will continue to push for regional growth through Quantium Solutions, especially in the areaof e-commerce logistics, against the backdrop of rapid internet growth in North Asia.
Concurrently, we are expanding our in-country distribution networks in the region, especially inthe India market.”
Net cash from operating activities amounted to S$29.1 million in Q1 FY2010/11, compared toS$67.7 million in the same quarter of last year, due to an increase in working capital.
