Singapore Post reports fiscal 1Q net profit dropped 40.4 percent on fair value loss, higher tax

Singpost Centre at Paya Lebar MRT in SingaporeSingpost Centre at Paya Lebar MRT in Singapore in March 2018

Singapore Post reported on Friday that its fiscal first quarter net profit dropped 40.4 percent to S$18.72 million on an exceptional fair value loss on warrants from an associated company, reflecting changes in their market value, and higher tax.

Operating profit, excluding one-off items, rose 1.2 percent on-year in the quarter ended 30 June to S$39.2 million, it said in a filing to SGX before the market open on Friday.

SingPost posted an exceptional loss of S$6.0 million on the fair value loss of the warrants from an associated company, compared with a year-earlier exceptional gain of S$4.0 million last year, mainly on a fair value gain of the same warrants.

Its income tax expense increased 38.8 percent on-year in the quarter to S$11.626 million, SingPost said.

Fiscal first quarter revenue increased 3.3 percent to S$372.6 million, as international mail and last-mile deliveries rose, driven by e-commerce, and property rental income rose, it said.

The property segment operating profit rose 67.1 percent on-year in the quarter to S$13.2 million, mainly on rental income from the SingPost Centre retail mall, which saw committed occupancy rise to 96.7 percent by the end of the quarter, it said.

The post and parcel segment operating profit fell 3.8 percent on-year in the quarter to S$41.77 million, it said.

The e-commerce segment’s operating loss widened to S$9.313 million in the quarter, from a loss of S$4.8 million in the year-earlier quarter, impacted by ongoing efforts to integrate the U.S. businesses, it said. Revenue in the segment fell 4.3 percent on changes in business mix, Singapore Post said.

“Overall, the group continues to benefit from positive global e-commerce trends, with e-commerce-related revenue from across the segments rising 8.8 percent to make up 53.7 percent of group revenue,” SingPost said.

The logistics segment swung to an operating profit of S$86,000 in the quarter, from an operating loss of S$2.45 million in the year-ago period, it said. That was mainly on a turnaround at Quantium Solutions, where losses were reduced by 44.6 percent, it said. But the segment’s revenue fell 2.2 percent, largely on lower freight forwarding volumes, SingPost said.

SingPost declared an interim dividend of 0.5 Singapore cent a share for the quarter, flat with the year-earlier level.

In its outlook, Singapore Post was cautiously upbeat.

“The group remains well-positioned to benefit from the strong growth in global e-commerce and last-mile deliveries,” it said.

“Domestic mail volumes are expected to trend downwards. While international mail has grown due to cross-border e-commerce deliveries, transhipment competition continues to be intense and volumes may come under pressure, especially with higher terminal dues,” SingPost said. “As part of our mitigating measures, we are managing our revenue mix while keeping focused on margins and profitability.”


Get Shenton Wire headlines in your inbox