SingPost’s net profit drops 5% to S$42m in 3Q11

The country’s postal industry struggles for survival despite dipping mail volumes.

According to a financial statement, the group’s revenue saw a marginal increase to S$149.4 million in the third quarter of FY2011/12 against the backdrop of a slowing economy.

Logistics revenue rose by 5.2% to S$57.0 million with the growth in Speedpost business, efulfilment activities in Quantium Solutions and vPOST shipping business. The Retail segment posted an increase in revenue of 5.1% to S$17.6 million as higher contributions from retail products and online store Clout Shoppe offset the drop in agency services and financial services. Mail revenue dipped 3.4% to S$98.0 million due to declines in domestic mail and international mail volumes.

Rental and property-related income grew 1.1% to S$10.7 million, as a result of higher rental income from Singapore Post Centre.

Total expenses for the Group rose by 3.6% to S$114.5 million. Approximately S$2.7 million was for upgrading of talent, IT systems and operations to drive future revenues. Labour and related expenses were higher as a result of the investments in group capabilities and also from increases in salaries and contract labour costs in the tight labour market.

Net profit amounted to S$41.6 million, a decline of 5.2% compared to the same quarter last year. Excluding one-off items, the Group’s underlying net profit was S$38.9 million, a decrease of 5.0%.

Dr Wolfgang Baier, Group Chief Executive Officer of SingPost, said: “Globally, the postal industry has been struggling in the face of industry-specific challenges and now, it has become even more challenging with the weakening economy. What’s in our favour is our strong foundation which puts us in a good position to invest for growth. Over the past months, we have been investing in the necessary capabilities and resources to drive our diversification and regionalisation efforts. We are mindful that, even as we continue to invest for growth, cost management will remain a key focus. We are implementing cost management initiatives and focusing on spending only in areas that will drive our growth efforts.”