5 Useful Things Investors Should Learn About Singapore Post Limited

Singapore Post Limited (SGX: C6L) is one of the cool companies in Singapore that shares webcasts and/or transcripts of their earnings presentations (the link for Singpost is here).

The mail service carrier needs no introduction, as it should be well-known by Singaporeans. Beyond mail services, Singpost is also in the logistics services business.

You can read more about the company in here.

What’s the story?

Below are five useful things I learned from listening to the webcast of Singpost’s latest fiscal first-quarter earnings presentation for the year ending 31 March 2016 (FY15/16):

  1. Deputy Chief Financial Officer Daniel Phua highlighted a few points for the quarter:
    • Total expenses, which grew 24.7% year-on-year, increased at a faster rate than revenue due to acquisitions and continued investments in Singpost’s transformation.
    • Elsewhere, Singpost recorded one-off gains from the disposal of its subsidiaries, and some property, plant and equipment. This is part of the reason why the mail and logistics outfit’s net profit rose by 15.8% year-on-year but underlying profit (which strips away one-off gains) only climbed by 8%.
  2. The tepid growth in revenue from the mail segment was in part due to the disposal of Datapost Hong Kong and Novation Solutions. Singpost expects to complete the remainder of the Datapost sale in its fiscal second-quarter. For context, revenue for the mail segment only grew by 1.6% year-on-year for the first-quarter of FY15/16.
  3. Capital expenditures were higher for the fiscal first-quarter ($75.6 million) due to investments in an eCommerce logistics hub which is expected to be completed by 2016.
  4. Speaking of Singpost’s transformation into an eCommerce-logistics provider, Chief Executive Officer Wolfgang Baier said that the disposal of the hybrid mail business helps the company redeploy its resources and focus on eCommerce-related businesses. Baier also said that the 80% stake that Singpost has taken in FPS Rotterdam broadens the company’s back-end freight forwarding network platform into Europe and the Asia Pacific region.
  5. Finally, Baier spent time to talk about the strengthening of Singpost’s relationship with China-based eCommerce titan Alibaba Group. The firm will be raising S$187.1 million from the issue of 107.6 million new shares to Alibaba Group. This will leave AliBaba with a 14.5% stake in Singpost.

Foolish takeaway

To buy and hold a company’s shares for the long-term also means the need to keep up with developments in the company.

The access to management teams via webcasts and transcripts gives the Foolish investor a fair chance to judge for themselves whether they would like to be invested alongside those teams. It also helps us put together a more complete thesis around a company and keep up with developments in its industry.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.