Net profit at Singapore Post (SingPost) fell 13.6 per cent to $31 million for its first quarter, the firm reported yesterday.
This was despite a 6.2 per cent year-on-year rise in revenue for the three months ended June 30. The figure increased to $354.1 million thanks to expansion in its postal and logistics businesses.
But underlying net profit fell 24.7 per cent, mainly because of lower domestic mail volumes, costs from planned investments, increased competition in the logistics segment, and associates that were investing for growth.
An interim dividend of 0.5 cent per share was declared, down from 1.5 cents a year ago.
SingPost said strong international mail growth drove postal revenue up by 9.3 per cent, even as domestic mail revenue declined with more organisations moving to electronic statements.
Cross-border e-commerce-related deliveries increased, especially with rising volumes from the Alibaba Group.
Yet, even though profits from such trans-shipment activities increased, they were insufficient to offset the decline in domestic mail earnings, which led to postal operating profit declining 13.7 per cent.
AT A GLANCE
NET PROFIT: $31 million (-13.6%)
REVENUE: $354.1 million (+6.2%)
DIVIDEND PER SHARE: 0.5 cent (-66.7%)
Logistics revenue grew 6.1 per cent as SP Parcels and Couriers made more e-commerce-related deliveries, and as Famous Holdings saw higher contributions from overseas operations.
Quantium Solutions, however, was hit by competition in North Asia, which negated improvements in the use of the Regional eCommerce Logistics Hub in Singapore.
Earnings per share came in at 1.20 cents, down from 1.49 cents for the same quarter last year, while net asset value per share was 76.28 cents, up from 75.03 cents as at March 31.
SingPost said the challenges in North Asia, along with costs from planned investments to build SingPost's e-commerce logistics network, caused logistics operating profit to drop 39.3 per cent.
It said e-commerce revenue fell and operating losses rose from a year ago, largely because of TradeGlobal, which lost two of its biggest clients, as announced previously.
SingPost said it will focus on raising volumes and utilisation of its network, to improve economies of scale and operating leverage.
The mall at the new SingPost Centre is expected to open in October, and the group will begin to recognise rental income progressively from the second half of this financial year.