SingPost first quarter profit up 3.2% to S$40.7mln

While other services posted growth, retail revenue dipped 1.2% behind lower contributions from agency and retail products.

Singapore Post Limited (SingPost) on Wednesday announced its unaudited results for the first quarter ended 30 June 2010.

Improved Performance in Core Business

The Group’s revenue for the first quarter of FY 2010/11 increased 13.5% to S$138.2 million. Growth was attributed to improved performance in the Mail and Logistics segments as well as the consolidation of Quantium Solutions for the full quarter compared to two months in the same quarter last year, according to a SingPost report.

Mail revenue increased by 11.4% to S$95.7 million, on higher domestic and international mail traffic. Logistics revenue recorded a 34.4% jump to S$46.3 million mainly attributable to the inclusion of Quantium Solutions and growth in transshipments and vPOST shipping. Retail revenue dipped 1.2% to S$16.3 million as lower contributions from agency and retail products offset the growth in financial services.

Rental and property-related income recorded a marginal growth of 1.6% to S$10.1 million. Miscellaneous income rose to S$4.2 million from the amortization of deferred gain on intellectual property rights related to the collaboration with Postea, Inc, as well as trade-related foreign exchange gains.

Total expenses for the Group rose 19.0% to S$103.1 million. This was due partly to the consolidation of Quantium Solutions as well as higher expenses in labour and related costs and the effect of reduced benefits from the Government’s Jobs Credit Scheme. Finance expenses also rose as a result of additional interest expenses from the S$200 million Fixed Rate Notes issued on 30 March 2010.

The Group’s net profit grew 3.2% to S$40.7 million. Excluding one-off items, such as benefits from the Jobs Credit Scheme and amortisation of deferred gain on intellectual property rights, the underlying net profit rose a marginal 1.0% to S$37.3 million. Said Mr Ng Hin Lee, Deputy Group Chief Executive Officer of SingPost: “In spite of the challenging landscape, particularly pressure from e-substitution and competition, we have managed to grow our business in the first quarter. We are seeing an increase in business activity, thanks to a recovering economy.”

Transforming to remain globally relevant

Mr Ng added, “As we continue with our transformation to remain globally relevant, we will focus our efforts on diversification and growth. Our objective is to build a more balanced revenue and earnings portfolio by growing non-mail contributions and driving regional growth. We will continue to push for regional growth through Quantium Solutions, especially in the area of e-commerce logistics, against the backdrop of rapid internet growth in North Asia. Concurrently, we are expanding our in-country distribution networks in the region, especially in the India market.”

Interim quarterly dividend of 1.25 cents per share

Net cash from operating activities amounted to S$29.1 million in Q1 FY2010/11, compared to S$67.7 million in the same quarter of last year, due to an increase in working capital.

The Board of Directors has declared an interim quarterly dividend of 1.25 cents per ordinary share (tax exempt one-tier) payable on 31 August 2010.