SINGAPORE (Aug 3): Singapore Post (SingPost) reported 1Q FY18/19 earnings of $18.7 million, down 40.4% from $31.4 million a year ago due to an exceptional fair value loss on warrants from an associated company as well as higher tax expenses.
Revenue for the quarter grew 3.3% to $372.3 million from the restated 1Q FY17/18 revenue of $360.5 million, driven mainly by a 67.1 % increase in operating profit under the Property segment due to rental income from the SingPost Centre retail mall as committed occupancy improved.
While revenue from international mail and last-mile deliveries grew on higher e-commerce contributions, the segment’s margins were lower and resulted in a decline in Post and Parcel operating profit.
Logistics revenue fell due to lower freight forwarding volumes.
The e-commerce segment also saw a 4.3% decline in revenue due to changes in business mix, while its operating profit was impacted by ongoing integration efforts of the US businesses.
Total group expenses grew 2.7% to $336.3 million from $327.6 million a year ago, due mainly to higher volume-related expenses as well as administrative & other expenses, which were offset in part by lower selling and finance expenses.
Income tax expenses rose 38.8% to $11.6 million due to an additional tax provision for a foreign subsidiary.
The company also registered an exceptional loss of $6 million due to fair value loss on warrants from an associated company, compared to a gain of $4 million in the same quarter a year ago.
Excluding exceptional items, group operating profit would have risen 1.2% in 1Q instead of declining 22.3% y-o-y to $33.3 million.
As at end-June, total assets amounted to $2.7 billion due to higher cash and cash equivalent, contributed by cash from operations.
An interim dividend of 0.5 cent has been declared. It will be paid out on 31 Aug.
Going forward, SingPost believes it remains well-positioned to benefit from the strong growth in global e-commerce and last-mile deliveries, although it expects domestic mail volumes to trend downwards.
The group says it is integrating its E-commerce and Logistics businesses to derive synergy benefits, and continues to focus on its turnaround plan and the coming peak season in view of the challenging US market. It is also executing a cost transformation program to optimise the group’s cost base for the sake of competitiveness in the e-commerce logistics space.
As at 10.51am, shares in SingPost are trading 6 cents lower at $1.32.
