SingPost's Q4 net profit down 14.6% at $26.1m

SingPost's Q4 net profit down 14.6% at $26.1m

Bogged down by higher costs and one-off expenses, Singapore Post (SingPost) rang in net profit that was 14.6 per cent lower at $26.1 million for the fourth quarter ended March 31, 2013.

Excluding one-off items, however, net profit for the quarter actually grew 18.7 per cent to $31.8 million.

Revenue for the quarter grew 25 per cent to $182.5 million, boosted by contributions from newly acquired subsidiaries.

For the financial year, net profit shrank 3.9 per cent to $136.5 million, but registered a 4.1 per cent growth to $140.9 million, on an underlying basis. Revenue increased 13.9 per cent to $658.8 million.

During its fourth quarter, the group saw growth in revenue across all its business divisions, with logistics making the largest advancement of 40.7 per cent to $75.9 million.

Mail revenue grew 20.1 per cent to $115.7 million, lifted by the contribution of Novation Solutions, which the group bought last year. Excluding it, mail revenue growth would have been 9.8 per cent.

With domestic mail volume declining for the sixth straight quarter as of end-March, the financial year also saw a 2.6 per cent fall in letter mail volumes - SingPost's first-ever annual decline.

This was mitigated somewhat by the increasing volume of local and international e-commerce packets, the group said.

Even so, expenses continued their siege on the bottom line during the quarter, increasing almost across the board. Labour and related expenses grew 15.5 per cent to $54.9 million because of new staff hires and additional headcount from the group's new subsidiaries.

Volume-related expenses, which accounted for the lion's share of costs, surged 53.4 per cent to $63.7 million, as international volumes and conveyance costs rose.

The prospects for snail mail appear challenging, with SingPost expecting postal volumes to fall 30 per cent by 2018. At the same time, however, the number of households is projected to increase by 30 per cent. This will saddle the delivery system with greater costs, according to SingPost's group CEO, Wolfgang Baier.

"This is why we're investing in sorting technology and productivity," Dr Baier said on Tuesday.

Last month, SingPost said that it was spending about $45 million to upgrade its mail sorting infrastructure, as part of a $100 million effort to boost productivity and service levels.

Earnings per share for the quarter and full year stood at 1.185 cents and 6.435 cents, respectively, down from 1.553 cents and 7.407 cents during the corresponding periods from the year before.

The group proposed a final dividend of 2.5 cents a share, unchanged from that of the preceding year's.

Its counter closed unchanged at $1.29 on Tuesday.

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