SINGAPORE - The faltering domestic postage market took some of the shine off Singapore Post's second-quarter numbers although the firm still managed to lift earnings.
While growth in its international mail and e-commerce business was robust, declining volumes and rising costs back home hit net profit.
Investments in initiatives to transform the business also had an effect, the firm said Thursday.
Earnings for the three months to Sept 30 came in at $37.6 million, up 5.5 per cent from a year earlier, while revenue rose 8.1 per cent to $220.3 million.
The firm noted that an increase in international e-commerce shipments and overseas logistics services offset shortfalls in its traditional postal business.
Total expenses rose 10.2 per cent to $188.8 million due to increased investments to build a regional e-commerce network.
Last month, SingPost announced it would spend $182 million to develop a logistics hub in Tampines LogisPark that will house automated parcel sorting and warehousing systems.
The groundbreaking ceremony takes place Friday.
Earnings per share was 1.584 cents, down from 1.68 cents a year ago, while net asset value was 47.62 cents per share, down from 36.52 cents.
The group declared a dividend of 1.25 cents payable on Nov 28.
Net profit for the six months rose 5.3 per cent to $76.8 million while revenue was up 6.4 per cent at $431.3 million.
Chief executive Wolfgang Baier said e-commerce-related revenue contributed more than a quarter of total turnover for the first half.
"We are also beginning to see bigger contributions from our logistics segment as we seek to rebalance our revenue portfolio and forge ahead with our aim to be the regional leader in e-commerce logistics," he added.
"The postal business, however, remains very challenging with the continued decline in domestic mail volume and rising operating costs. The postage rate adjustment will help to partially mitigate cost increases in the mail business."
Results were posted after the close of trading.
SingPost shares closed one cent lower at $1.94 on Thursday.