SingPost operational profit plunges by 46.7%
The group’s total revenue went up by 34.7% because of other business segments.
Singapore Post reported a dive of 46.7% in its first quarter ended 30 June operational profits on the back of the low post and parcel revenues.
SingPost said that due to a structural decline in letter mail, lower e-commerce logistics volume, and continued supply chain disruptions that impacted the group’s international e-commerce operations, post and parcel profits went down to $10.6m in Q1 2022 compared to $19.9m in the same period last year, offset by strong profit contributions from SingPost’s logistics segment.
The group’s operating expenses also went up due to higher volume-related expenses from the consolidation of its Freight Management Holdings (FMH) business and growth in Famous Holdings, costs of fuel, labour and utilities have risen. Air conveyance rates remained elevated in Q1, in addition to COVID-19 lockdowns in cities in China, where the majority of SingPost’s international e-commerce volumes originate, impacting cost.
However, the group saw its revenue increase by 34.7% to $475.2m from $352.9m last year om the back of higher contributions from FMH and Famous Holdings Revenue in the property segment was lower due to the deconsolidation of General Storage Company (“GSC”), however, excluding GSC, property revenue was higher.
“The Group is actively managing the challenges in the Post and Parcel business. In addition, air conveyance costs have started to moderate subsequent to the end of Q1 for the financial year 2022 to 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,” SingPost said.
SingPost added that the group is focused on prudent cost management and cost efficiency in the group’s operations, including 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.