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SingPost reports 46.7% lower group operating profit of $10.6 mil in 1QFY2023 business update

·3-min read

In its business update, the group reported 1QFY2022/2023 revenue of $475.2 million, 34.7% higher y-o-y.

Singapore Post (SingPost) has reported group operating profit of $10.6 million for the 1QFY2022/2023, 46.7% lower y-o-y, despite the higher revenue during the quarter.

In its business update, the group reported 1QFY2022/2023 revenue of $475.2 million, 34.7% higher y-o-y, thanks to higher contributions from the Australia business including Freight Management Holdings (FMH), which continued to “perform well”.

During the quarter, the group also continued to record higher revenue from Famous Holdings.

However, revenue in the property segment fell y-o-y due to the deconsolidation of General Storage Company (GSC). Excluding GSC, property revenue stood higher y-o-y.

Group operating expenses for the quarter increased by 39.8% y-o-y to $466.3 million largely due to higher volume-related expenses from the consolidation of FMH and growth in Famous Holdings. The growth also includes higher costs of fuel, labour and utilities.

Air conveyance rates remained elevated in the 1QFY2022/2023, in addition to Covid-19 lockdowns in cities in China, where most of the group’s international e-commerce volumes originate, impacting cost.

As at June 30, cash and cash equivalents stood at $485.6 million.

In the 1QFY2022/2023, letter mail volume fell by 8% y-o-y, but offset by higher admail volumes. This led to an overall 2.1% y-o-y decline for the group’s domestic post & parcel (DPP) letters and printed papers category to 100.4 million.

DPP e-commerce logistics fell by 26.1% to 7.7 million due to a pullback in e-commerce volumes following easing of pandemic restrictions, as well as lower volumes from a major e-commerce customer who has insourced part of its logistics.

International post & parcel (IPP) items plunged by 32.5% y-o-y to 2.7 million on the back of supply chain disruptions.

The number of consignments in Australia was up by 29.5% y-o-y to 7.2 million due to the addition of FMH’s volume and growth in CouriersPlease’s business. FMH recorded higher volumes on business growth and new customers.

In SingPost’s property segment, SingPost Centre mall saw committed occupancy dip 0.8 percentage points q-o-q to 99.2%. Meanwhile SingPost Centre’s office and enrichment portfolio saw a 1 percentage point increase to 94.5%.

Total portfolio committed occupancy inched up by 0.1 percentage point q-o-q to 95.9%.

Looking ahead, the group says it is “actively managing” the challenges in its post and parcel business. In addition, air conveyance costs have started to moderate subsequent to the end of 1QFY2022/2023.

“The group continues to execute its transformation strategy to expand from the postal business to a global logistics enterprise. The diversification into Australia has started to contribute significantly to the group’s financials, and we continue to expand our reach in the market and extract operational synergies,” says SingPost on Aug 19.

“We are focused on prudent cost management and cost efficiency in the group’s operations. This includes the simplification and integration of various international operations to drive synergies and cost efficiency, and to enable the group to better serve the cross-border e-commerce logistics market,” it adds.

As at 9.20am, shares in SingPost are trading 0.5 cent lower or 0.794% down at 62.5 cents.

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