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SingPost Q2 Results - October 29, 2009
[Press Release.]
Q2 revenue rose 7.9%; net profit up 8.3%
The Group’s revenue increased 7.9% to S$130.3 million in the second quarter, boosted by
the consolidation of revenue from Quantium Solutions Group (formerly known as G3
Worldwide Aspac group of companies) (“Quantium Solutions”), which became wholly-owned
since May 2009. On a comparable basis with the same quarter last year, the Group’s
revenue would have registered a decline of 4.5% without the consolidation of Quantium
Solutions.
Mail revenue decreased 4.4% to S$87.6 million on lower international mail contributions.
Logistics revenue increased 142.6%, benefiting from the first full quarterly contribution from
Quantium Solutions, although revenue from Speedpost saw a decline. In Retail, revenue
remained relatively steady.
Rental and property-related income continued to grow, rising 23.1% to S$10.1 million, with
higher rental income from Singapore Post Centre and the leasing of space at the repurposed
post office buildings.
The Group’s total expenses increased 10.8% to S$94.4 million in the second quarter, due
mainly to the consolidation of Quantium Solutions. Excluding Quantium Solutions, Group
expenses would have declined 4.0%. Labour and related expenses rose, as higher staff
base offset the benefits from the Jobs Credit Scheme. Volume-related expenses increased,
as higher costs of sales offset the decline in traffic expenses. The rise in administrative and other expenses was largely due to additional costs from Quantium Solutions and higher
professional and consultancy fees.
For the second quarter, the Group’s net profit grew 8.3% to S$40.5 million while its
underlying net profit declined by 8.6% to S$35.4 million.
Said Mr Wilson Tan, Goup Chief Executive Officer of SingPost: “Although the global
economy is showing signs of recovery, the postal industry typically experiences a longer
recovery runway. We are certainly not out of the woods yet and we continue to face
unrelenting pressures from the operating environment.”
He added: “We remain disciplined on cost management, and are focused on expanding
Quantium Solutions’ business beyond cross-border mail and extending its core
competencies in Asia Pacific. We will continue to reinvent ourselves and stay relevant to
our customers, while actively pursuing new growth opportunities.”
Review of First-half Performance
In the first half of FY2009/10, the Group’s revenue grew 4.3% to S$252.0 million as the
consolidation of Quantium Solutions offset revenue declines from Mail and Logistics.
Excluding the consolidation of Quantium Solutions, revenue in the first half declined by
5.6%.
Total expenses rose 8.2% to S$181.1 million in the first half, due to the consolidation of
Quantium Solutions. Excluding Quantium Solutions, total expenses would have declined
3.3%.
For the first half, the Group’s net profit grew 4.0% to S$79.9 million while underlying net
profit declined by 6.9% to S$72.3 million.
New Terminal Dues To Impact Singpost's Profit By 5%
[ Angela Tan, Business times
.]
Singapore Post said on Thursday that the new terminal dues starting January 1, 2010 will affect its underlying net profit by 5 per cent yearly.
'The annualised impact is estimated to be around 5% of underlying net profit,' the postal and logistic group said.
With effect from 1 January 2010, Singapore will be reclassified as a New Target Country from the current category of Developing Country by the Universal Postal Union (UPU) for the purpose of terminal dues settlements, i.e. settlements for the processing and delivery of international mail between countries.
SingPost will settle terminal dues under a new settlement structure, which will result in an increase in its net terminal dues payments for international mailing as terminal dues payable by Target Countries are generally higher.
It said the group has and will continue to take active measures to mitigate the effect.
For the second quarter ended September 30, 2009, SingPost's underlying profit slipped 8.6 per cent to S$35.41 million.
Its underlying net profit is defined as profit after tax and minority interest before one-off items and gains and losses on property, plant and equipment.
SingPost has declared an interim dividend of 1.25 cents a share, to be paid on November 30, 2009. The dividend payout is unchanged from a year ago.
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