SingPost sinks into red with $9.9m first-half loss despite record revenue
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Earnings per share declined to 0.68 cents from 1.23 cents a year ago.
ST PHOTO: KELVIN CHNG
Russell Marino Soh
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SINGAPORE - Despite attaining its highest half-year revenue ever, Singapore Post reported a net loss of $9.9 million for the first half of the fiscal year ended September 2022, reversing from its profit of $35 million for the same period in 2021.
Earnings per share fell to 0.68 cent from 1.23 cents a year ago.
The board has declared an interim dividend of 0.18 cent per share for the half year, which will be paid to shareholders on Nov 30. For the same period in 2021, the group had declared an interim dividend of 0.5 cent per share.
In its results released on Thursday, the postal service company attributed the loss to a higher put option redemption liability on Freight Management Holdings (FMH), which had been consolidated in December 2021. Higher valuation of the company led to a fair value charge of $21 million.
Revenue for the first half of the fiscal year came in at a record $958.9 million, driven mainly by higher contributions from the logistics business, which drew in $680.8 million, up 79.4 per cent from $379.5 million a year ago. This was credited to the consolidation of FMH and international freight forwarding volume growth.
However, the group noted continued weakness in its post and parcel business, which registered a 19.6 per cent year-on-year drop in revenue to $261.7 million.
On the international front, elevated air conveyance rates and lockdowns in China were cited as key factors in the decline.
On the home front, the group pointed to a dip in the volume of domestic letters and parcels, as well as a major customer who had insourced its logistics.
Operating expenses for the first half rose 34.9 per cent to $920.8 million, from $682.6 million for the same period a year ago. This more than offset the group’s 31.1 per cent increase in revenue, leading to a decline of 19.1 per cent in operating profit to $41.3 million, down from the $51.1 million posted previously.
Commenting on its outlook, SingPost said it remained optimistic, highlighting that its revenue and earnings profile will continue to shift towards logistics and overseas markets as it executes new growth initiatives. It also expressed hope for its property business, citing “healthy interest and demand seen in the Paya Lebar Central area”.
SingPost shares were trading down one cent, or 1.8 per cent, at 54 cents as at 11.07am on Thursday. THE BUSINESS TIMES
