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SingPost aims to deliver the ‘Future of Post’; SATS seeks out new growth areas

The Edge Singapore
The Edge Singapore • 3 min read
SingPost aims to deliver the ‘Future of Post’; SATS seeks out new growth areas
Singapore Post has been named the company with the fastest growth in profit after tax in the transportation sector.
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A household name with over 160 years of history, Singapore Post has been named the company with the fastest growth in profit after tax for this industry sector. In the three years taken into consideration, SingPost, as it is better known, recorded a CAGR earnings growth of 39.7%, with a big lift coming from its FY2018 ended March 2018 results.

Coupled with good scores in other categories, SingPost emerged as the overall sector winner for the transportation industry sector as well.

Apart from providing postal services, SingPost has also reinvented itself as a pioneer and leader in e-commerce and logistics. The range of services offered includes front end web management, warehousing and fulfilment, last-mile delivery and international freight forwarding.

In the company’s most recent earnings announcement, SingPost notes that the pandemic continues to create disruptions across the global economy. As such, it is actively adapting measures to navigate the current environment, including seeking new e-commerce growth opportunities in Singapore, Australia and the Asia Pacific region.

See also: 'Gradual recovery' for Singpost as mail flies again: OCBC

SingPost also warns that with the ongoing Covid-19 pandemic, its performance in certain business segments will continue to be affected by factors beyond its control, including the impact of border closures and higher international conveyance costs out of Changi Airport. It is constantly looking at new means to improve its businesses, such as the international post and parcel segment.

Within Singapore, SingPost is implementing the so-called “Future of Post” initiative, which it claims will “redefine the Postal business to capture the broader growing opportunities for smart urban logistics.”

For example, public trials for a key component of this ecosystem — PostPal, the world’s first-ever “Smart Letterbox” — was introduced in Clementi last December.

SATS, the ground-handling and in-flight catering service provider at Changi Airport, has been named the company with the best weighted ROE. The Billion Dollar Club regular scored 12.92 times in this metric.

While the pandemic has decimated air travel, SATS diversified its revenue base: Its catering arm serves not just the airlines but also army camps, hospitals and other large organisations while its wholly-owned subsidiary Country Foods also distributes the Impossible Foods’ meat-alternative brand in Singapore.

When the company reported its 1QFY2021 ended June 30 results, it says that the ongoing mass vaccination exercise and discovery of Covid-19 variants have created “uncertainty” on the lifting of air travel restrictions. The company is thus adapting by “reshaping” its cost base and building new capabilities like food production to support future growth.

Photo: The Edge Singapore

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