SingPost’s Q1 operating profit up 55.2% to $4.1 million
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SingPost said revenue gains in its post-office network and property-assets segments largely counterbalanced a mixed performance in logistics and letters.
ST PHOTO: LIM YAOHUI
Shikhar Gupta
- SingPost's Q1 operating profit rose 55.2% to $4.1 million due to better cost management and efficiency, despite a slight 0.9% revenue drop to $93.4 million.
- Domestic parcel volume grew 36.5%, offsetting declines in mail volume and international business, while operating expenses fell 2.4%, helped by fuel cost controls.
- The company opened a $30 million automated sorting facility, maintained strong property and post office performance, and held a net cash position of $314.7 million as of June 30.
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SINGAPORE – Singapore Post recorded an operating profit of $4.1 million for its first financial quarter ended June 30, up 55.2 per cent from the $2.6 million in the corresponding year-ago period.
The growth was driven primarily by cost management, lower labour-related costs and efficiency gains, it said in a business update on Aug 26. Operating profit margin expanded to 4.4 per cent from 2.8 per cent a year earlier.
The prior-year operating profit was restated from $3.4 million to $2.6 million following recent divestments, establishing a more like-for-like baseline.
Revenue for the first quarter fell marginally by 0.9 per cent year on year to $93.4 million from $94.2 million.
SingPost said revenue gains in its post-office network and property-assets segments largely counterbalanced a mixed performance in logistics and letters.
Within logistics and letters, domestic parcel volume expanded 36.5 per cent year on year to 7.1 million items, helping to mitigate continued declines in mail volume and international business headwinds. Domestic mail volume fell 16.2 per cent to 67.3 million items.
SingPost noted that domestic mail performance was also buffered by a postage uprate introduced in January.
Operating expenses fell 2.4 per cent year on year to $89.3 million from $91.5 million. SingPost noted that rising fuel costs from an oil price shock during the quarter were mitigated through route optimisation, fleet electrification and electricity cost hedging.
In July, the company commissioned a $30 million automated parcel sortation facility at its regional e-commerce logistics hub, which is expected to support its target to reduce cost to serve by more than 10 per cent.
In the post office network segment, performance improved due to transaction support services provided for Singtel special discounted shares from April, as well as higher rental yields from post-office properties. The group intends to maintain a physical footprint of at least 40 touchpoints across Singapore.
Property leasing revenue, which consists mainly of rental income from SingPost Centre, also improved marginally. SingPost Centre achieved 100 per cent overall occupancy as at June 30, up from 97.8 per cent a year earlier. The company added that it has appointed an architect to advise on a potential asset refresh for SingPost Centre.
As at June 30, SingPost’s cash and cash equivalents stood at $664.4 million, up from $603.8 million as at March 31. This was boosted by a cash inflow of $52.8 million from the sale of 10 Housing Board post-office shops. The group remained in a net cash position of $314.7 million.
Borrowings were flat at $349.7 million, while total equity rose to $1.48 billion from $1.43 billion as at March 31.
SingPost shares closed unchanged at 34 cents on Aug 27. THE BUSINESS TIMES
