SingPost's Q1 revenue up 12% but profit falls on higher costs

SingPost saw its group profit on operating activities nearly halve to $22 million for the quarter.
SingPost saw its group profit on operating activities nearly halve to $22 million for the quarter.PHOTO: ST FILE

Continued growth in e-commerce deliveries helped lift revenue at Singapore Post in the first quarter, but that could not offset the harsh impact from the pandemic.

It noted that turnover increased 12 per cent to $360 million for the three months to June 30.

This was driven by the continued growth in the international post and parcel business, as well as at the CouriersPlease and Quantium Solutions subsidiaries.

However, higher revenue brought about a corresponding increase in costs as a result of supply chain disruptions.

Expenses grew 22 per cent to $341 million for the period, SingPost noted in an update on Tuesday night.

This sent group profit on operating activities falling from $42 million a year earlier to $22 million for the quarter.

Its financial performance was also hit by the "adverse impact" the pandemic had on the firm's customers with doubtful debt provisions possibly increasing, SingPost said.

E-commerce volumes rose across the board in Singapore, Australia and internationally for the quarter. SingPost delivered 8.7 million items under the domestic post and parcel e-commerce business, up 52 per cent from a year earlier.

"Initiatives such as the new tracked letterbox product facilitated contactless deliveries at a cost-effective price point and saw significant traction among customers," the company said.

E-commerce volumes for the international and post and parcel business grew 30 per cent to 7.2 million kg in the quarter.

However, volumes of letters and printed papers in Singapore continued to shrink, falling by a third to 100 million items delivered compared with 149 million a year earlier.

E-commerce volumes rose across the board in Singapore, Australia and internationally for the quarter. SingPost delivered 8.7 million items under the domestic post and parcel e-commerce business, up 52 per cent from a year earlier.

This downtrend was "expected due to electronic substitution", and was exacerbated by reduced business mailing during the circuit breaker for most of the quarter, SingPost said.

Costs also increased as a result of health and safety arrangements, including temporary housing for Malaysian employees here.

 
 

In addition, the pandemic caused a "massive disruption" to international air freight out of Changi Airport, which led to delays and increased conveyance costs.

SingPost shares closed 1.43 per cent up at 71 cents yesterday.

THE BUSINESS TIMES

A version of this article appeared in the print edition of The Straits Times on August 13, 2020, with the headline 'SingPost's Q1 revenue up 12% but profit falls on higher costs'. Print Edition | Subscribe