Singapore Post (SingPost) has reported earnings of $11.5 million for the 1HFY2024 ended Sept 30, compared to the $9.9 million loss in the corresponding period the year before.
Earnings per share (EPS) stood at 0.27 cents from the loss per share of 0.68 cents in the previous year.
Underlying net profit stood at $13.4 million, 1.9% higher y-o-y.
The reversal to profitability was attributed to the group’s Australian logistics business and international cross-border business.
Revenue for the six-month period, however, fell by 13.7% y-o-y to $827.3 million, due to the normalising of sea freight rates and volume after the Covid-19 pandemic, as well as foreign exchange (forex) impact.
Operating expenses fell by 13.4% y-o-y to $797.4 million.
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Group operating profit fell by 24.0% y-o-y to $31.4 million due to lower freight forwarding profit from Famous Holdings group, the loss in the domestic postal business and adverse foreign currency translation impact
Exceptional items were slashed by 91.7% y-o-y to $2.0 million largely due to a fair value change from a higher put option redemption liability. This offset the gains on disposal of property, plant and equipment and assets held for sale.
According to SingPost, about 85% of its overall revenue was generated internally. Its Australia business secured new customers across industries while the positive trajectory from its international cross-border business helped to mitigate the declines in the freight-forwarding and domestic postal business.
At the same time, the group’s domestic postal business incurred a loss in the 1HFY2024 from lower mail volumes and higher inflationary costs, especially in fixed infrastructure such as the post office network.
On Sept 19, SingPost announced that it will raise its domestic postage rates by 20 cents from Oct 9. The move is expected to improve its domestic postal business in the 2HFY2024.
The group is in discussions with the authorities to review the domestic postal business model and to develop a framework for commercial viability.
Revenue and profit contributions from Famous Holdings were lower in tandem with the declining sea freight outlook. Sea freight rates and volumes have contracted significantly from the highs during the pandemic.
Property revenue stood lower y-o-y due to the cessation of leases at some of the group’s smaller properties.
SingPost has declared an interim dividend of 0.18 cents per share for the 1HFY2024, unchanged from the year before. The dividend will be paid on Nov 30.
As at Sept 30, cash and cash equivalents stood at $449.4 million.
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“Our diversified portfolio and global presence, including our expanded operations in Australia, have enabled us to demonstrate resilience in the current uncertain global economic climate despite adverse currency movements. The positive operational performance underscores the headway made in our transformation,” says Vincent Phang, SingPost’s group CEO.
"We have made good progress in our transformation as demonstrated by our 1HFY2024 results and will continue to execute our growth strategy. The board has advanced in the strategic review to enable the group and its individual businesses to be valued appropriately,” he adds.
Shares in SingPost closed at 45 cents on Nov 1.
