Singapore Post yesterday pledged to continue its acquisitions drive in Asia as it unveiledstable Q1 profits driven mostly by logistics and e-commerce growth.
SingPost’s group revenue for quarter ending June 30, 2011, rose 3% to S$142.3 million (€82.7million). Mail revenue increased 1.6% to S$97.2 million on higher contributions from domestic mail,particularly in government and business mail, as well as from direct mail.
The expanding Logistics business recorded the strongest growth, with revenue up 10.7% to S$51.2million on the back of better performances in Quantium Solutions, Speedpost and vPOST shippingactivities, the group announced.
Retail revenue increased 1.5% to S$16.6 million due to higher retail product contributionsoffsetting the decline in financial services revenue following the sale of the SpeedCash businessin March 2011. Rental and property-related income rose 5.1% to S$10.6 million while miscellaneousincome increased 7.9% to S$4.5 million.
The group’s net profit dropped 3.5% to S$39.2 million while underlying net profit, whichexcludes one-off items, was stable at S$37.4 million.
Ng Hin Lee, Chief Executive Officer (Postal and Corporate Services), commented: “In spite of theslower economy in the first quarter, the group’s topline grew 3% with all business segments showingimprovements in revenue. Logistics recorded strong revenue growth mainly from Quantium Solutionswhich saw good traction from regional e-fulfilment business and transhipment. Operating conditionsremained challenging but overall, we maintained underlying net profit at a stable level of S$37.4million.”
Dr Wolfgang Baier, Chief Executive Officer (International), reiterated that SingPost wouldcontinue on the acquisitions trail in order to diversify and expand its business. “While theoutlook remains challenging for the group, we are committed in our efforts to transform thebusiness to achieve a more balanced revenue and earnings profile. As part of our diversificationand regionalisation strategy, we have been actively looking at M&As and growth opportunities,particularly in regional logistics and e-commerce, and over the past few months have made severalstrategic investments in these areas.”
These include Malaysia’s GD Express, Chinese e-commerce logistics provider Shenzhen 4PX ExpressCo. and a 30% stake in Vietname firm Indo Trans Logistics. In February, SingPost acquired a95% stake in Clout Shoppe, an online luxury retail shop, in line with its strategy to grow itse-commerce business.
SingPost also made two other investments in the first quarter to expand its regional e-postbusiness. In May it acquired the remaining 30% stake in DataPost, a hybrid mail business withoperations in five markets. In June, SingPost took a 20.12% stake in Efficient ESolutions, aleading Business Process Outsourcing (BPO) company in Malaysia engaging primarily in the provisionof integrated business process outsourcing solutions in data and document processing.
Baier added: “The regional investments strengthen our network and enable us to gain entry intodeveloping markets with growth potential such as China, IndoChina and India. We are working onleveraging these regional assets as well as our existing regional subsidiary Quantium Solutions tofurther harness growth opportunities, making the necessary investments in people, infrastructure,technology and processes. We will also continue to explore M&A opportunities and seek the rightpartners in Asia Pacific to create long term value for SingPost and its shareholders.”
