Singapore Post reports fiscal 4Q swung to net loss on impairment charges

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

Singapore Post reported Tuesday its fiscal fourth quarter swung to a net loss of S$75.11 million, from a year-ago profit of S$31.84 million on impairment charges on its U.S. businesses.

In April, SingPost said it would sell its U.S. e-commerce businesses Jagged Peak and TradeGlobal.

After reviewing the carrying value of the U.S. businesses, SingPost said it took a total impairment of S$98.7 million; it added it would continue to account for those businesses’ operating losses until it completes the exit.

“Despite our best efforts in turning the U.S. business around, we faced increasingly intense challenges which impacted our performance.
As a result, we made the difficult decision to commence the sale process for our U.S. eCommerce business,” Paul Coutts, SingPost’s CEO, said in the statement.

“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,” Coutts said.

Revenue for the quarter ended 31 March fell 2.1 percent on-year to S$374.06 million due to declines in the logistics and e-commerce segments, the postal and logistics company said in a filing to SGX before the market open.

The post and parcel segment posted “stable” revenue of S$188.85 million as growth in international mail was offset by a decline in domestic mail volumes, the company said. The segment’s profit on operating activities fell 8.3 percent on-year in the quarter to S$34.14 million, it said.

The logistics segment posted a 2.9 percent revenue decline to S$116.72 million for the quarter as contributions from Quantium Solutions declined following the exit of unfavorable customer contracts; in addition, Couriers Please, the Australian delivery service, was hurt by the Australian dollar’s depreciation against the Singapore dollar, the filing said.

The loss on operating activities for the logistics segment was S$4.69 million for the quarter, widening from a year-ago loss of S$199,000, the filing said.

The e-commerce segment posted a 7.7 percent decline in revenue to S$57.02 million on intensifying competition and cost pressures in the U.S. and an increase in customer bankruptcies.

The loss on operating activities for the e-commerce segment was S$17.99 million, widening from a loss of S$6.85 million in the year-ago quarter, the filing said.

In the property segment, revenue rose 2.2 percent on-year in the quarter to S$22.68 million on rental income from the SingPost Centre retail mall, which began operations in October 2017, the filing said. The segment’s profit on operating activities was up 1.7 percent on-year at S$13.28 million for the quarter, SingPost said.

SingPost recommended a final dividend of 2.0 Singapore cents a share, for a total annual dividend of 3.5 Singapore cents a share.

For the full year, the company reported net profit fell 86 percent on-year to S$18.96 million on revenue of S$1.56 million, up 2.9 percent.

 

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