Singapore Post today announced double-digit revenue growth for the third quarter ending December31, 2012, but profits slipped due to the costs of investing in new business activities and lower
mail volumes.The listed company reported a 14.5 per cent rise in Q3 revenues to S$171 million but costswent up by nearly 20 per cent, leaving net profits down 5.1 per cent at S$39.5 million. Over thefirst nine months of the 2012-13 fiscal year, SingPost’s revenues grew 10.1 per cent to S$476million while net profits fell slightly to S$110.4 million.
The key revenue driver was e-commerce growth in all business areas, including internationalpackages, express deliveries (Speedpost), regional logistics (Quantium Solutions) and consumerretail sales (Clout Shoppe), along with contributions from acquisitions. However, domestic mailvolume declined for the 5th consecutive quarter.
Mail revenues increased to S$118.1 million, with lower mail volumes offset by very stronggrowth in international e-commerce packages and contributions from Novation Solutions. Logisticsrevenue rose 10.9 per cent to S$63.2 million with growth coming from e-fulfilment activities inSingapore and the region.
The Retail segment posted a 19.8 per cent increase in revenue to S$21.1 million on the backof higher contributions mostly from e-commerce business Clout Shoppe as well as from financialservices.
Wolfgang Baier, Group Chief Executive Officer of SingPost, commented: “Our topline growth inQ3 was driven by e-commerce activities across all business segments as well as contributions fromNovation Solutions, which we acquired in May 2012. While we are seeing encouraging results from ourtransformation efforts especially from new business areas, our traditional mail business continuesto be under pressure, particularly domestic mail volume which saw its 5th consecutive quarterdecline.”
SingPost noted that the 19.8 per cent rise in operating costs was a combination ofinflationary cost increases, investments into service quality and productivity ranging from moreefficient customer processes such as online booking tool ezy2ship, innovative new services andspending on people to drive transformation efforts. To mitigate the rising operating costs, thegroup has been implementing cost management measures as well as pushing productivity andoptimisation.
Baier added: “Regardless of the fact that domestic mail volume is falling, we are continuingto invest in service quality. We take our public service obligations very seriously and put inadditional resources, for instance, to cater to the peak festive months. Our postmen andnon-operations staff including management made special package/parcel deliveries on two Saturdaysin December. These measures are over and above the investments we had made in our parcel sortingmachines and capacity increases. Our efforts and investment have paid off as negative feedbackdropped more than 70 per cent compared to 2 years ago.”
Looking ahead, the CEO highlighted the company’s recently updated corporate vision thatfocuses on continued investments in postal infrastructure in Singapore, a push for productivity andinclusivity, and service quality, and a focus on committing significant effort and investment tomulti-year transformation.
“SingPost’s new vision ‘to be the regional leader in e-commerce logistics and trustedcommunications’ embodies our commitment to all our stakeholders. We are transforming our businessto stay relevant to our customers’ changing digital lifestyle needs. At the same time, we are stilltheir trusted postmen to provide them the last mile physical delivery. In the future, we want tooffer digital mail options as well,” Baier said.
SingPost will also continue to invest in people, IT and operations in its multi-yeartransformation. “Besides committing to customers and investing in new postal infrastructure inSingapore, we will focus on helping our staff, be it upskilling them or driving their productivitylevel up so they can enjoy a better quality of life. Our people are the most important component ofour transformation journey. Without our dedicated people, all the best strategies and plans wouldremain on paper,” the postal chief declared.
