SingPost third-quarter profit falls 5.1% to $39.5m

PHOTO: SingPost third-quarter profit falls 5.1% to $39.5m

Singapore Post has reported lower third-quarter profit, citing higher costs for business development and property-related expenses.

Net profit fell 5.1 per cent to $39.5 million, or 1.889 cents per share, from $41.6 million, or 2.2 cents per share, a year earlier.

The company said yesterday that the weaker performance was largely due to higher corporate costs for the transformation and development of businesses, lower other income and higher property-related expenses.

Turnover rose 14.5 per cent to $171 million for the three months ended Dec 31, 2012 on the back of e-commerce activities and contributions from its newly acquired printing and transactional mail business, Novation Solutions.

"While we are seeing encouraging results from our transformation efforts, our traditional mail business continues to be under pressure - particularly domestic mail volume, which saw its fifth consecutive quarter decline," said SingPost CEO Wolfgang Baier.

Revenue from its mail division grew 20.5 per cent year-on- year to $118.1 million.

Excluding the contributions by Novation Solutions, mail revenue growth would have been 15.1 per cent.

Logistics revenue rose 10.9 per cent to $63.2 million, while the retail business contributed $21.1 million to revenue, a gain of 19.8 per cent.

Total expenses increased 19.8 per cent to $137.1 million, due mainly to higher labour and volume-related costs.

Depreciation and amortisation expenses, too, went up with a one-time write-off of intangible assets relating to a release agreement with an associated company. For the nine-month period, net profit edged 0.9 per cent lower to $110.4 million, while revenue was up 10.1 per cent at $476.3 million.

The group had a net cash position of $154.1 million, pending the use of the funds for investment opportunities.

SingPost has embarked on a series of growth initiatives, such as acquisition opportunities in Singapore and the region. It is also focusing on cost management and investing in new technologies to enhance productivity, given the inflationary environment and rising labour-related expenses.

SingPost kept its interim quarterly dividend unchanged at 1.25 cents per share.

The counter closed one cent higher at $1.21 yesterday.