Higher investment in growth business areas contributed to a 5.2% drop in Singapore Post’sprofits for the third quarter ending December 31, 2012, the company announced yesterday.
Group revenue saw a marginal increase to S$149.4 million (€90.5 million) in the third quarter ofFY2011/12 against the backdrop of a slowing economy. The core mail business saw revenue dip 3.4% toS$98.0 million due to declines in domestic mail and international mail volumes.
But logistics revenue rose by 5.2% to S$57.0 million with the growth in Speedpost business,e-fulfilment activities in Quantium Solutions and vPOST shipping business. The Retail segmentposted an increase in revenue of 5.1% to S$17.6 million as higher contributions from retailproducts and online store Clout Shoppe offset the drop in agency services and financialservices.
Driven by higher investment, total expenses rose by 3.6% to S$114.5 million. Approximately S$2.7million was for upgrading of talent, IT systems and operations to drive future revenues. Labour andrelated expenses were higher as a result of the investments in group capabilities and also fromincreases in salaries and contract labour costs in the tight labour market.
As a result, SingPost’s Q3 net profit declined 5.2% to S$41.6 million (€25.2 million) while theunderlying net profit, excluding one-off items, was 5% lower at S$38.9 million.
Dr Wolfgang Baier, Group Chief Executive Officer of SingPost, said: “Globally, the postalindustry has been struggling in the face of industry-specific challenges and now, it has becomeeven more challenging with the weakening economy. What’s in our favour is our strong foundationwhich puts us in a good position to invest for growth.
“Over the past months, we have been investing in the necessary capabilities and resources todrive our diversification and regionalisation efforts. We are mindful that, even as we continue toinvest for growth, cost management will remain a key focus. We are implementing cost managementinitiatives and focusing on spending only in areas that will drive our growth efforts.”
He added: “We have implemented corporate-wide initiatives to build a stronger SingPost based onfive business pillars namely, mail, digital services, logistics, e-commerce and retail andfinancial services.”
SingPost has been working on its digital mailbox solution to provide customers another optionfor receipt of their mail. It has also been growing other digital services as it transforms itssubsidiary Datapost to become a regional business outsourcing player. SingPost had recentlyannounced its acquisition of Novation, a security printing and transactional mail provider in HongKong.
In Logistics, SingPost has been leveraging its recent investments in logistics companies in theregion, as well as its regional platform in Quantium Solutions, in order to strengthen the Group’slogistics network in Asia Pacific. It is pursuing opportunities in e-commerce fulfilment whileexpanding its vPOST reach in the region. On the retail front, SingPost continues to expand itsofferings including financial products and services and will start to test mobile offeringssoon.
SingPost had in November 2011 invested in a multi-purpose sorting machine that is able toprocess between 10,000 and 15,000 packages in an hour, as it adapts to the changing mail profile.It has also been upgrading its track and trace capability and other IT systems to provide bettercustomer service. It has expanded its airmail transit centre facility at the airport leading toenhanced processing time and better service during the year-end peak.
Customers have also been able to enjoy greater convenience with SingPost’s lastest serviceofferings and collaborations. These include being able to perform simple banking transactions andexchanging new notes at its post offices, being able to drop off Speedpost EMS articles at 7-Elevenoutlets and enjoying a faster and enhanced delivery for eBay customers sending packages to USAthrough the new ePAC service.
