Singapore Post recovers from loss as Q4 profit hit $40.09m

It was boosted by the growth of its postal and logistics segments.

Singapore Post's (SingPost) full-year profit for 2017 surged from $33.4m in 2016 to $126.4m. Revenue was up 8.6% from $1.35b to $1.46b. The company was able to recover from a $66.45m loss in Q4 2016 and reported profits of $40.09m and revenue higher by 13.5% at $367.54m.

According to SingPost's financial statement, revenue was boosted by the growth of its postal and logistics segments.

For the full year, postal revenue grew 15% due to higher international mail revenue which helped offset the decline in domestic mail revenue.

International mail revenue rose 37.4% to $369m, driven by higher cross-border e-commerce deliveries, in particular from the Alibaba Group. Meanwhile, domestic mail revenue dipped 6.6% to $229.4m, due to lower letter mail volumes with the continued migration towards electronic forms of communication.

Logistics revenue jumped 4.3% thanks to higher last-mile e-commerce delivery volumes in Singapore and Australia for SP Parcels and Couriers Please respectively, as well as higher freight forwarding volumes for Famous Group.

However, SingPost continued to face revenue declines at Quantium Solutions, which faced competitive pressures at its Hong Kong operations. "This negated the improved performance for Quantium Solutions Singapore from higher utilisation at the Regional e-commerce Logistics Hub," it said.

Also read: SingPost eyes building e-commerce platform

The e-commerce segment's revenue rose 15.7% in Q4 and was stable for the full year.

SingPost noted that despite the loss of two major customers as disclosed last year, TradeGlobal registered revenue growth of 38.5% in Q4 and 3.7% for the full year through the addition of new customers.

The company said it is well-positioned to benefit from the strong growth in global e-commerce and last-mile deliveries. "Domestic mail volumes are expected to trend downwards while International mail is expected to grow on the strength of e-commerce. Blended margin is expected to decline with the change in mix," it added.

It continued that it is undergoing structural cost transformation to optimise its cost base.

SingPost proposed a final dividend of 2 cents per ordinary share to be paid on 31 July 2018.

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