SingPost profits rose 15.6% to $50.2m in Q3

The earnings boost came after SingPost diluted its interest in logistics firm 4PX.

Singapore Post’s (SingPost) profits for Q3 grew 15.6% YoY to $50.2m from $43.41m, an announcement revealed. Its revenue also edged up 7.6% YoY from $410.39m to $441.38m.

The increase in profits was attributed to an exceptional gain on the dilution of its interest in associated company 4PX in China which incurred higher expenses from investing in warehousing and infrastructure in Q2 that brought down the firm’s earnings. 4PX has ceased to be an associated company after SingPost’s shareholding was diluted through the issuance of additional 4PX shares to an existing shareholder of the China-based logistics firm, the announcement added.

Also read: Singapore Post Q2 profits slipped 12.9% to $25.15m

Revenue was also driven by stronger contributions across all of SingPost’s business segments during the global e-commerce peak season.

In the post and parcel segment, increased domestic and international e-commerce deliveries drove revenue up 9% to $213.2m in Q3 from $195.64m. Profit on operating activities also rose 10% with domestic margins improving on the back of ongoing integration of the firm’s postal and parcel last mile delivery networks.

LaMP or Last Mile platform is SingPost's latest proprietary logistics software which seeks to consolidate last mile delivery services such as courier services, parcel lockers and brick-and-mortar collection points onto a single platform. In December 2018, SingPost partnered with cloud-based logistics optimisation firm LogiNext to provide parcel traceability and reliability for customers across Southeast Asia. 

Meanwhile, the logistics segment recorded a 67.4% rise in profit on operating activities driven by lower losses at Quantium Solutions which saw its profitability improve. SingPost noted that there is an ongoing review of unfavourable customer contracts at Quantium Solutions, with the exit of some unprofitable customers dragging its revenue.

The e-commerce segment saw higher volumes driven by festive shopping in the US, however operating loss rose amidst intense competitive pressures.

Also read: SingPost's turnaround may take three years as US losses widen

“Costs such as freight and outsourced services were up significantly to support the increased volumes,” SingPost explained. “The Group continues to face challenges in the e-commerce operating environment in the US due to intensifying competition and rising customer bankruptcies.”

It further added the underperforming US business is expected to remain loss-making going into 2019.

The board of directors declared an interim dividend of $0.05 per ordinary share to be paid on 28 February 2019.