It blamed the one-off $98.7m impairment charges from its US businesses.
Singapore Post (SingPost) sank into the red after profits plummeted 86% YoY to $18.96m in FY2018/2019 from $135.5m in FY2017/2018, an announcement revealed. On the other hand, revenue edged up 2.9% YoY from $1.51b to $1.56b.
In Q4, SingPost recorded a $75.11m profit loss, reversing its $31.84m gain during the same period in 2017. Revenue for the quarter also dipped 2.1% YoY from $381.92m to $374.06m.
Also read: SingPost profits rose 15.6% to $50.2m in Q3
Its dismal earnings performance was blamed on total exceptional losses in Q4, comprising largely of a $98.7m impairment for its US businesses, TradeGlobal and Jagged Peak, and a $9.9m provision for overseas restructuring operations. These were partially offset by gains totalling $12.1m on its investment properties and $6m from the divestment of SingPost’s interest in Indo Trans Logistics Corporation.
Meanwhile, the increase in FY2018/2019 revenue was led by growth from SingPost’s post & parcel and property segments. In the post & parcel segment, revenue rose 4.1% YoY for the full year, driven by a strong international mail revenue growth of 9.3%, with higher cross-border e-commerce-related delivery volumes.
Its property segment revenue, which comprises commercial property rental and the self-storage business, rose 13.5% YoY for the full year and 2.2% in Q4, on the back of rental income from the SingPost Centre retail mail, which commenced operations in October 2017 after redevelopment. Committed occupancy for the mall was recorded at 98.9% as at 31 March, up from 95.6% in 2018.
SingPost’s logistics segment also ended the year with a slight revenue decline of 0.3% for the full year, despite the group’s freight forwarding business recording higher revenue due to an increase in freight rates. “This increase was offset by a revenue decline in the exit of unfavourable customer contracts for Quantium Solutions and the strengthening of the SGD against the AUD for CouriersPlease,” SingPost explained, adding that loss on operating activities for the logistics segment narrowed by 76.2%, largely due to a reduction in losses at Quantium Solutions.
Similarly, in the e-commerce segment, revenue declined 0.3% for the full year, as the group continued to face challenges in the US amidst intensifying competitive and cost pressures and increasing customer bankruptcies in the industry. Loss on operating activities widened to $51.9m for the full year, according to SingPost’s financial statement.
Following a strategic review of the US businesses, its prospects and the additional investments required, the group decided to sell its US businesses and exit the US market, and refocus its efforts in Southeast Asia and Asia Pacific.
For Q4, the board of directors recommended a final dividend of $0.02 per ordinary share, bringing the annual dividend for the financial year to $0.035. This represents a payout ratio of 79% of underlying net profit.
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