Losses in its new eCommerce business in the US saw SingPost profit slump about 28 per cent to S$31.4 million (US$22 million) for the past quarter.
This is despite its revenue rising 16.8 per cent to $369.4 million.
As well as its offshore eCommerce business, it blames the drop on costs related to the new Regional eCommerce Logistics Hub plus a fall in domestic mail volumes.
Covering group CEO Mervyn Lim says SingPost is building out its capabilities, and broadening and deepening its eCommerce logistics network to secure its future. “There are challenges along the journey, and it is going to take a number of years for our investments to contribute.”
Singpost is viewing its US eCommerce subsidiary TradeGlobal, formed in November 2015, as a financial risk because of its poor performance, and is considering its future.
Its other US eCommerce subsidiary Jagged Peak, formed in March last year, contributed to the rise in the group’s revenue.
In the postal segment, domestic mail revenue declined, particularly because of financial institutions pushing e-statements. This was offset by growth in international mail revenue, driven by higher cross-border eCommerce-related deliveries, especially with increased volumes from China’s Alibaba Group.
Logistics revenue rose by 5.6 and 5.2 per cent for the third quarter and nine months respectively, driven by higher contribution from Couriers Please and Quantium Solutions thanks to increased eCommerce-related activities.