Singapore Post announces Q1 results with strong e-commerce growth

SingPost

Despite challenges brought about by the Covid-19 pandemic, Singapore Post’s (SingPost) revenue rose 12% Y-o-Y to $360m compared to $321m last year, led by continued growth in cross-border e-commerce delivery volumes in International Post and Parcel, as well as at the CouriersPlease and Quantium Solutions subsidiaries.

While revenue rose, this brought about a corresponding increase in costs as a result of the supply chain disruptions detailed above. These were partially mitigated by the Job Support Scheme. Group operating expenses rose by 22% Y-o-Y, with higher operating expenses, Profit on Operating Activities declined 49% to $22m.

The Group experienced strong e-commerce volume growth in Singapore, Australia and for international cross-border deliveries. For the Domestic Post and Parcel business, the Group saw significant e-commerce volume growth of 52% for the quarter ended June. Initiatives such the new tracked letterbox product facilitated contactless deliveries at a cost effective price point and saw significant traction with customers. e-commerce volume now stands at slightly less than 10% of all domestic deliveries.

In the International Post and Parcel business, cross-border e-commerce volumes were resilient and continued to grow. For the Logistics segment, CouriersPlease has seen solid volume growth in Q1 as the e-commerce market in Australia expanded strongly, partly as a result of Covid-19.

However, volumes of letters and printed papers in Singapore continue to decline as expected due to electronic substitution. Business mailing was also reduced as a result of the circuit breaker. The Group was faced with higher costs as a result of health and safety arrangements for Covid-19, including temporary housing for its Malaysian colleagues in Singapore.

In addition, Covid-19 has caused a massive disruption to international airfreight out of Changi Airport, resulting in delays and increased conveyance costs. As a result of this disruption, the company said it might temporarily experience volumes being diverted away from Singapore by some of its key customers. Terminal dues for international postal items also increased since January.

The freight forwarding business, Famous Holdings, continued to be impacted by the slowdown in global trade, as well as the additional challenge of Covid-19, resulting in lower volumes.

In the Property segment, the retail mall saw a decline in footfall since March due to the circuit breaker measures and many tenants had to temporarily close as a result. The Group had provided additional financial assistance to help support them during this difficult time. This cost has been partially reflected in Q1, and will continue into Q2. In spite of these challenges, occupancy remained stable.

There remains significant uncertainty in the operating environment due to Covid-19. The Group stated that earnings and operating cashflows will continue to face headwinds from the disruptions to businesses and that the extent and duration of the headwinds will depend on when the global pandemic situation will ease up.

Notwithstanding the immediate challenges, SingPost said it remains committed to its transformation efforts. The Group is implementing the Future of Post initiative, which will reengineer the Postal business to capture the broader growing opportunities for smart urban logistics. A key component of this ecosystem, the world’s first-ever “Smart Letterbox”, will commence public trials in the next few months.

Source: Singapore Post

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