SingPost ecommerce delivered positive sales growth in the last quarter by 30.9% to $248 million (S333.4 million), but saw a decrease in net profit by 23%.
The increase reflects expansion in cross border ecommerce activities, as well as the integration of new US subsidiaries TradeGlobal and Jagged Peak. Both of these companies run ecommerce fulfillment and logistics operations, acquired in November 2015 and March 2016, respectively. The company recently won Japanese fashion brand UNIQLO’s ecommerce business in Thailand.
Ecommerce related revenues more than doubled from $54.3 million to $122 million. They now make up 49.3 % of Group revenue, up from 28.7% last year.
Ecommerce related revenues now make up 49.3% of the total Group revenue, up from 28.7% last year.
Logistics revenue rose 11.9% to $116.7 million, with steady organic growth at Quantium Solutions and CouriersPlease, as well as the inclusion of a new subsidiary under Famous Holdings. Increased cross border ecommerce related activities led postal revenues to a 1.5% rise, indicating an increased demand of cross border services.
Increased cross border ecommerce related activities led postal revenues to a 1.5% rise, indicating an increased demand of cross border services.
Total expenses increased 33.6%, driven largely by growth in international mail traffic and ecommerce logistics volumes that reflect the change in the Group’s business mix.
Net profit attributable to equity holders declined 23.0% to S$35.9 million, due largely to one-off gains from the divestments of Novation Solutions and DataPost HK in the corresponding period last year.
From the SingPost Press Release:
Underlying net profit, which excludes one-off items, was down 11.2%, due to investments in business transformation. Rental income declined as the Singapore Post Centre (“SPC”) retail mall is being redeveloped, while depreciation charges were incurred for the Regional ecommerce Logistics Hub, which obtained a Temporary Occupation Permit in April 2016.
SingPost also continued to invest in ecommerce IT and operational capabilities. Mr Mervyn Lim, Covering Group Chief Executive Officer, said, “We are investing in our business transformation and that will take time to contribute materially to earnings. We are focused on executing our strategy to create value from our acquisitions and build an integrated global ecommerce logistics ecosystem. SingPost’s strategy to protect the postal core and grow its ecommerce logistics network remains on track.”
The good news will be welcomed by SingPost, following the company’s spell of negative headlines regarding internal investigation over board members, and the stepping down of Director Keith Tay in May.
Access the press release here
By Anutra Chatikavanij & Felicia Moursalien