SingPost net profit up 15.8%, helped by one-off gains

SingPost said it expects to record an estimated gain of over $30 million from the divestment of Novation Solutions and Datapost (HK), as well as DataPost.
SingPost said it expects to record an estimated gain of over $30 million from the divestment of Novation Solutions and Datapost (HK), as well as DataPost.PHOTO: SINGAPORE POST

SINGAPORE - Singapore Post reported on Wednesday a 15.8 per cent rise in its net profit to $46.6 million for the first quarter ended June 30, 2015, compared to $40.2 million for the year-ago period.

Miscellaneous income amounted to $13.6 million, compared to $5.9 million a year ago. This was largely due to one-off gains from the disposal of Novation Solutions and DataPost (HK). Excluding these, underlying net profit rose 8 per cent to $40.3 million, from $37.3 million a year ago.

Continuing growth in eCommerce and logistics and and the inclusion of new subsidiaries saw revenue increase by 20.7 per cent to $254.6 million. Excluding the impact of M&As including the divestment of subsidiaries, revenue remained constant.

Mail revenue grew 1.6 per cent to $125.1 million where the postage revision from October 2014 offset the effect of declining traditional mail volumes and the partial loss of revenue after the divestment of Novation Solutions and DataPost (HK) in the first quarter.

SingPost said it expects to record an estimated gain of over $30 million from the divestment of Novation Solutions and Datapost (HK), as well as DataPost (pending completion).

Revenue from logistics, which also includes SingPost's eCommerce logistics business operations, grew 43.6 per cent to $140.1 million. SingPost said this growth, along with the corresponding 74.6 per cent improvement in operating profit from logistics, reflect both the growing demand for eCommerce logistics as well as SingPost's progress in expanding its share in the growing market.

Retail & eCommerce was higher by 5.6 per cent where vPOST and the front-end web solutions business were able to offset the decline in revenue from financial services and retail agencies, it said.

Total expenses rose 24.9 per cent to $222.7 million from $178.4 million a year ago, "broadly in tandem with revenue growth", said SingPost. The largest cost increase was for volume-related expenses due to higher international postal traffic and increased eCommerce-related deliveries, it added.

Said Dr Wolfgang Baier, SingPost's group CEO: "We have a set of numbers that demonstrates the progress we are making in the transformation of SingPost. This quarter, our revenue and net profits are our highest ever."

He added: "We are adding one or two major eCommerce customers each month. Just three weeks ago, we announced that we have a new arrangement with Alibaba to create an end-to-end logistics platform around our reorganized subsidiary Quantium Solutions International. We will embark on a joint strategic business development framework with Alibaba and they are increasing their equity in us from 10.23 per cent to 14.51 per cent."

By end June, SingPost was in a net cash position of $329.0 million, which will be used to support investment, capital expenditure, working capital and other funding needs.

An interim dividend of 1.50 cents per share, to be paid on August 27, 2015, was declared. This compares to an interim dividend of 1.25 cents per share paid a year ago.