SingPost third quarter profit flat at $43.8mn

The group gained from the increase in business and e-commerce logistics activities that boosted its mail and logistics revenues.

Singapore Post Limited (“SingPost”) on Friday announced its unaudited results for the third quarter and nine months ended 31 December 2010.

Improving economy and growth in e-commerce logistics activities boost Q3 performance
Group revenue grew 6.3% to S$148.5 million in Q3 FY2010/11 with improved performances from the Mail and Logistics segments.

Mail revenue grew 7.5% to S$101.5 million as domestic and international mail recorded stronger performances. In Logistics, revenue increased 10.2% to S$54.2 million due to growth in Quantium Solutions, trans-shipment and vPOST shipping activities. Retail revenue stayed constant at S$16.8 million with growth in financial services offset by the decline in agency services and retail business, according to a SingPost report.

Rental and property-related income was S$10.6 million, an increase of 4.0%, as a result of higher rental income from Singapore Post Centre.

Total expenses for the Group amounted to S$110.5 million, an increase of 10.3%. Labour and related expenses increased as a result of higher contract labour costs and the absence of the benefit from the government’s Jobs Credit Scheme, which ceased in June 2010.

Volume-related expenses were higher due to higher traffic expenses arising from increased international traffic and conveyance costs. Administrative and other expenses were higher, due mainly to increases in property tax and other property related and administrative expenses. Finance expenses included additional interest expenses from the S$200 million Fixed Rate Notes issued on 30 March 2010.

Net profit for the Group was S$43.8 million, or flat compared to the corresponding period last year, while underlying net profit was S$40.9 million, an increase of 5.1%.

Mr Ng Hin Lee, Deputy Group Chief Executive Officer of SingPost, said: “In Q3, we benefitted from the increase in business and e-commerce logistics activities, which boosted our mail and logistics revenues. Our trans-shipment business has also grown rapidly in tandem with the boom in e-commerce activities in the region.”

Organisational restructure to accelerate transformation and growth
SingPost had on Thursday announced an organisational restructure to accelerate its transformation and growth. With the new structure, which takes effect on 7 February 2011, the Group’s resources will be aligned to provide greater focus on growing and transforming its mail business and to support its regionalisation and diversification drive.

Said Mr Ng: “With the global trend of declining mail volumes, it is imperative that we reduce our reliance on mail revenue and diversify our revenue base, growing our business within and outside Singapore. That said, mail is still a key business for us and we will continue to focus and invest in it to meet our customers’ changing and growing needs. The new structure will help us achieve our aim to build a more balanced revenue and earnings profile, while taking care of our existing customers.”

Interim quarterly dividend of 1.25 cents per share
Net cash from operating activities was lower at S$120.3 million, compared to S$137.4 million previously, due to working capital changes.

The Board of Directors has declared an interim quarterly dividend of 1.25 cents per ordinary share (tax exempt one-tier) payable on 28 February 2011.