The Postman dead set on chasing low-cost-carrier strategy

Is it bowing out of the industry competition?

According to DBS, the company is pursuing a Low-Cost-Carrier (LCC) strategy rather than speed to compete with the likes of DHL and FedEx. 

Singpost offers a niche service due to its access to last mile delivery network of postal peers in various countries.

Here's more from DBS:

It has a strong balance sheet with S$139m net cash, and acquires a business only if it is earnings-accretive and provides new capabilities or geographies.

Excluding contribution from new subsidiaries, revenue grew a healthy 9.6%. Overall operating profit edged up 0.9% to S$43.7m. The Mail segment booked S$34.8m operating profit, down 0.3% y-o-y.

Meanwhile, the Logistics segment recorded S$2.6m operating profit, up 116.5% y-o-y, due to the inclusion of Famous Holdings and General Storage Company.

But operating profit for Retail & E-commerce fell 63.8% to S$1.4m due to development costs incurred for its e-commerce business. Property & rental related income rose 11.5% y-o-y to S$11.5m, uplifting the operating income. Underlying profit benefitted from 60% y-o-y decline in interest costs due to the repayment of S$300m bond in April 2013.