SingPost suffers from first-ever annual decline in letter mail volumes

It's down 2.6% in FY13.

According to OCBC Investment Research, SingPost's domestic mail volume continued to decline for the sixth consecutive quarter, such that SingPost saw its first-ever annual decline of 2.6% in letter mail volumes in FY13. 

OCBC noted that with the mail volumes expected to trend lower although the number of households in Singapore trends higher, management has decided to invest S$45m in upgrading its sorting infrastructure to handle the changing profile of mail (rapid growth of packages and decline of letters).

Here's more:

Singapore Post (SingPost) reported a 25.0% YoY rise in revenue to S$182.5m but saw a 14.6% drop in net profit to S$26.1m in 4Q13, bringing  full year net profit to S$136.5m, accounting for about 94% of our full year estimate.

Excluding one-off items such as a S$5.7m write-off of intangible assets, underlying net profit was S$141.0m, which was 2.5% shy of our forecast.

Labour-related expenses continued to rise with new staff hires and additional headcount from new subsidiaries, while volume-related expenses rose with growth in international volumes and higher conveyance and cost of goods sold.

Finally, admin expenses also increased in the last quarter, such that total operating expenses rose 17.2% QoQ. EBITDA margin fell from 31.0% in 4QFY12 and 33.4% in 3QFY13 to 25.8% in 4QFY13 as a result.