Singapore Post achieved double-digit revenue growth and improved profits in the year ending March 2015 thanks to its e-commerce logistics expansion, including strong fourth-quarter growth.
The postal group, in which Alibaba Group now owns a minority stake, reported a 12% rise in revenues to S$919.6 million, due to growth in its ecommerce and logistics businesses as well as contributions from new acquisitions. The underlying net profit, or earnings from its business operations, grew 5.2% to S$157.2 million.
For the fourth quarter ending 31 March 2015, SingPost’s revenue grew 28.7% to S$248.7 million, also driven by ecommerce logistics and consolidation of new subsidiaries. Underlying net profit improved 14.9% to S$41.1 million due to earnings from new subsidiaries.
The logistics business increased its full-year revenues by 26% to S$464.8 million and improved its operating profit by about 50% to S$21.5 million. The Retail & eCommerce business increased revenues by 6.2% to S$92 million and raised its operating profit to S$9.7 million (FY2013/14: S$7.5 million).
The highly profitable core Mail business grew 1.9% to revenues of S$500.3 million and had stable profits of S$144 million.
CEO Wolfgang Baier said: “These results demonstrate how our efforts to transform ourselves into an ecommerce logistics leader is progressing. Our logistics business has grown 26.1% year-on-year and such healthy rates of growth will cushion our declining mail revenues. We are going to keep up our investments to build our regional network and ecommerce capability and by doing this, we are reinventing ourselves. Our roots in mail and parcels give us the advantage of being able to sustain high service standards. This puts us where we can serve the needs of tomorrow’s customers in the fast moving world of ecommerce and online transactions.”
SingPost increased investments to drive its transformation during the year and expects to see the benefits of these investments in the years ahead. The group invested S$224.2 million in acquisitions to expand its regional network, its new Regional eCommerce Logistics Hub, additional POPStations to strengthen its parcels business, and new mail sorting equipment to improve the service quality of its Singapore mail operations. The Group expects.
The postal group emphasised that it remains committed to its transformation journey by investing into its people and infrastructure, and M&As will continue to be part of its growth strategy to build scale and secure its “first-mover advantage”.
Baier added: “The pace of innovation driven by global ecommerce mega-trends will only intensify. By building our international network and transforming the mindset of everyone at SingPost is how we will create long-term value for our customers and our shareholders.”
