International e-commerce growth was the key driver for higher revenues at Singapore Post in theApril – June 2013 quarter, although profits weakened slightly.
The Asian postal operator increased revenues by 32 per cent to S$201.3 million in the firstquarter of the 2013-14 fiscal year, mostly thanks to consolidation of several acquisitions.Underlying revenue growth reached 6.5 per cent.
Mail revenue was up 13.7 per cent to S$114.7 million, benefiting from the growth ininternational e-commerce packages, and the full consolidation of Novation Solutions. However,domestic letter-mail volume continued to slide for the 7th consecutive quarter.
In Logistics, revenue stood at S$93.8 million with the full consolidation of newsubsidiaries, Lock Store and Famous Holdings and the increase in regional e-fulfilment business.Logistics contributed 39.5 per cent of SingPost’s total revenue.
Revenue for the Retail & e-Commerce segment was flat at S$20.8 million. Front-ende-Commerce business comprising vPOST, Clout Shoppe and SP e-Commerce services grew whilecontributions from retail and financial services slowed.
Net profit dropped back 2 per cent to S$37.3 million in the first quarter as operating costsgrew by 39.4 per cent, thus outpacing revenue growth. The increase in expenses was attributed tocosts relating to integration of new subsidiaries, growth in the group’s businesses, investments toenhance service and productivity, as well as other cost increases. However, underlying net profit,excluding one-off items, remained stable at S$36.2 million.
CEO Wolfgang Baier said: “Domestic mail volume continued to shrink, making this the 7thconsecutive quarter of decline. Revenue contributions from new subsidiaries as well as the 6.5 percent organic growth across the group helped to lift overall business performance for Q1.
“Although revenue growth for the quarter was good, profit was impacted by higher expensesfrom the integration of new subsidiaries, developmental costs for new businesses and alsotrade-related foreign exchange fluctuations as we grow our regional business.”
Looking ahead, Baier said SingPost would continue to focus on expanding its business withtargeted investments, improved productivity and cost management. The company is investing more thanS$100 million over the next few years to improve service and increase productivity.
“Cost management remains a key focus as we implement measures across the Group, leveraging oneconomies of scale and synergies among businesses e.g. vPOST leveraging Famous Holdings for itsfreight requirements. We will continue to drive revenue growth to accelerate our transformation butat the same time, we are spending only on strategic areas that contribute directly to revenuegrowth,” he commented.
Measures include investing S$45 million in new-generation sorting machines to cope with thegrowth of package volumes and increase overall automated sorting, the introduction of three-wheelscooters instead of two-wheelers for heavier volumes and the POPStation parcel lockers.
Baier said: “Earlier this year, we launched five POPStations on a pilot basis. These 24/7self-collection kiosks increase productivity not only for SingPost but also for the customers whoneed no longer wait for the parcels at home. The parcels will now wait for them. They can choose tocollect their parcels at a time convenient to them. We will be accelerating the roll-out of thePOPStations and expect up to 100 POPStations to serve Singapore next year.”
