SINGAPORE (May 7): Singapore Post (SingPost) reversed into the red for the 4Q ended March, posting a loss of $75.1 million from earnings of $31.8 million a year ago due to impairment charges in exceptional items.

This also brings FY18/19 earnings to $19 million, down 86% from FY17/18  due to impairment charges of $98.7 million from its US businesses.

Excluding the impact of exceptional and other one-off items, underlying net profit declined 5.8% and 6.1% to $100.1 million and $14.5 million for the full-year and 4Q ended March, respectively, due to higher losses from the group’s US businesses.

Group revenue for 4Q fell 2.1% to $374.1 million from $381.9 million a year ago, largely due to declines in the logistics and e-commerce segments.

On a full-year basis, however, revenue grew 2.9% to $1.6 billion, led by growth in the post & parcel and property segments.

In the post & parcel segment, 4Q revenue fell 0.2% to $188.8 million due to lower domestic mail revenue, which was offset in part by higher revenue contributions from international mail.

Revenue for this segment grew 4.1% to $764.8 million over the full year due to strong international mail revenue growth with higher cross-border e-commerce-related delivery volumes.

Meanwhile, logistics revenue declined 2.9% and 0.3% for 4Q and the full year, respectively, due to lower contributions from Quantium solutions following an exit of unfavourable contracts as well as the Australia-based express parcel delivery business Courier Please, which was impacted by the depreciation of the Aussie dollar.

E-commerce revenue fell 7.7% in 4Q and 0.3% for FY18/19 as SingPost continues to face challenges due to intensifying competitive and cost pressures in the US, on top of higher customer bankruptcies in the industry.

Property segment revenue rose 2.2% and 13.5% for 4Q and the full year, respectively, due to rental income from the SingPost Centre retail mall.

Following a review of historical performance and evaluation for the value-in-house for each of its US businesses, the group has recorded a total impairment of $98.7 million to the carrying value of TradeGlobal and Jagged Peak.

As such, the group has decided to put its US businesses up for sale and make an exit from the US market. It expects to continue to account for operating losses on the US businesses until it completes its planned market exit.   

A final dividend of 2 cents per share has been recommended for 4Q. This brings the annual dividend for FY18/19 to 3.5 cents per share, representing a payout ratio of 79% of underlying net profit.

“We remain committed to our e-commerce business, as it remains a key part of our strategy towards future financial growth. The group’s competitive advantage lies in Asia Pacific where we are seeing the strongest growth in volumes and yields, and we will continue to refine our businesses to leverage the growth. In the immediate term, we continue to focus on improving our operations in Singapore to better serve the needs of customers in our home market,” says group CEO Paul Coutts.

As at 11am, shares in SingPost are trading 1 cent lower at $1.01.