Singapore Post today revealed a decline in Q4 and full-year profits due to rising costs anddespite a revenue boost from new business activities and acquisitions.
The Asian postal group’s net profits in the January-March 2013 quarter declined 14.6% to S$26.1million (€16.2m) while net profit for the full year ending March 31 declined 3.9% to S$136.5million (€84.5m). However, the full-year underlying net profit was higher by 4.1% excluding one-offitems.
Overall revenue grew 25% to S$182.4 million (€113m) in Q4, with the consolidation of newlyacquired subsidiaries as well as contributions from e-commerce related activities across allbusiness segments. Contributions from new subsidiaries included Novation Solutions which wasacquired in May 2012, General Storage Company in January 2013, and Famous Holdings in February2013. Full-year revenue grew 13.9% to S$658.8 million (€408m).
But Q4 operating costs soared by 32% to S$163.8 million due to a combination of the rising costsof doing business in Singapore, continued investments to enhance service quality and productivityand growth and consolidation of new businesses. For the year, total expenses rose 19.1%, alsooutpacing revenue growth.
In Mail, domestic mail volume continued to decline for the 6th consecutive quarter. For the fullyear, SingPost saw its first-ever annual decline of 2.6% in letter mail volumes. However, growth indomestic and international e-commerce packets, as well as increased hybrid mail contributionsboosted overall Mail revenue. Excluding Novation Solutions, Mail revenue grew 9.8% to S$105.8million in Q4, and 8.2% to S$417.0 million for the full year.
In Logistics, first-time consolidation of General Storage and Famous Holdings improved revenue.Excluding the two new subsidiaries, Logistics revenue grew by 11.2% to S$60 million in Q4, drivenby e-fulfilment growth in Quantium Solutions, Speedpost and transshipment business. For the fullyear, revenue grew 9.5% to S$235.7 million, excluding contributions from the new subsidiaries.
Q4 revenue for Retail & Financial Services increased 0.4% to S$18.2 million, with growth inretail products and Clout Shoppe contributions offsetting the decline from financial services andagency services. Annual revenue growth was 5.7%. Rental and property-related income grew by 12.5%to S$11.2 million with rental income growth in Q4. For the full year, it grew 1.4% to S$42.9million.
Dr Wolfgang Baier, SingPost’s Group Chief Executive Officer, explained: “The global postalindustry is under tremendous pressure. SingPost is also facing a rapidly changing and challengingpostal landscape amid rising costs. Domestic mail volume has declined for the 6th straightquarter.
“During the year, inflationary cost increases continued to impact our business despite thegroup’s mitigating measures which included raising productivity and optimising resources andoperations. We have been prudent in spending only in areas that contribute directly to eitherservice improvement or revenue growth. The domestic mail volume decline was mitigated by the strongcontributions from higher international e-commerce packages and mailroom management business. TheGroup’s transformation initiatives are necessary to survive the continuous mail volume declines andto meet customers’ changing needs,” he emphasised.
SingPost stressed that it is investing more than S$100 million to meet changing needs, improveservice and increase productivity. This includes the recently announcement of a S$45 millionupgrade of mail sorting technology to cope with greater volumes of packets and parcels and fewerletters. SingPost added that will continue to invest in its people, processes and technology toserve its customers better and become a more productive company. It has in the past months investedin innovation and rolled out more product and service offerings including the 24/7 POPStations, thePost-a-card mobile app, SMS Mail, and online shipment booking tool ezy2ship.
Baier said: “Despite the industry challenges, SingPost’s transformation is aimed at ensuringthat we continue to stay ahead and serve Singapore well. And this involves investing in building apost that will cater to the digital generation which we are already seeing. Ultimately, we areinvesting for our customers because we want to ensure that we can continue to give them the highestlevel of service that is even more convenient, faster and reliable.”
