SingPost eCommerce delivered soaring sales growth – and expenses – in the last quarter.
Revenue in the three months to June 30 grew a robust 30.9 per cent to S$333.4 million, buoyed by continued expansion of cross-border eCommerce-related activities, and the inclusion of contributions from new subsidiaries.
But net profit attributable to equity holders declined 23.0 per cent to $35.9 million, due largely to one-off gains from the divestments of Novation Solutions and DataPost HK in the corresponding period last year. Underlying net profit, which excludes one-off items, was down 11.2 per cent, due to investments in business transformation.
Interim group CEO Mervyn Lim said the company continued to invest in its 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.”
eCommerce-related revenues from across the postal, logistics and eCommerce segments more than doubled from $73.1 million to $164.1 million and now make up 49.3 per cent of group revenue – up from 28.7 per cent last year.
“The sharp increase reflects continued expansion in cross-border eCommerce-related activities across the group, as well as the inclusion of new US subsidiaries TradeGlobal and Jagged Peak,” the company reported.
“Correspondingly, overseas revenues rose to make up 50.2 per cent of group revenue, up from 37.8 per cent last year. Increased cross-border eCommerce-related activities led postal revenues to a 1.5 per cent rise, despite the deconsolidation of subsidiaries divested during the previous financial year.
International mail revenue was up 30.3 per cent to $65.5 million, while domestic mail revenue declined 4.3 per cent to $64.0 million due to lower volumes.
Logistics revenue rose 11.9 per cent to $156.7 million, with steady organic growth at Quantium Solutions and CouriersPlease, as well as the inclusion of a new subsidiary under Famous Holdings.
Revenue growth for the eCommerce segment was due mainly to the consolidation of new US subsidiaries, TradeGlobal from November 2015 and Jagged Peak from March 2016.
Operating losses from the segment increased from $1.9 million to $3.5 million as contributions from the newly acquired US subsidiaries were offset by continued investments in eCommerce IT and operational capabilities, as well as marketing and sales efforts in the US to build scale. Beyond these direct contributions, the eCommerce segment was an important driver of warehousing, freight, last mile delivery and customer care services for the logistics segment.
Rental and property-related income decreased 8.6 per cent to $9.7 million due to the loss of retail rental income from the redevelopment of SPC retail mall, which is due for completion by mid-2017.