Last week, Singapore Post Limited (SGX: S08) or SingPost released its 2018/19 first quarter (1Q FY18/19) earnings update. As a quick introduction, SingPost is a mail and logistics company, organised into four major segments of Post and Parcel, Logistics, eCommerce and Property.
Here, let’s look at 10 things that investors should know from its latest earnings update:
1. Sales revenue for the quarter improved 3.3% year-on-year to S$372.6 million.
2. Quarterly operating profit, however, declined 22.3% year-on-year to S$33.3 million.
3. Net profit for the quarter dropped 40.4% year-on-year to S$18.7 million. Excluding exceptional items, underlying net profit was down 9.8% to S$24.7 million.
4. Similarly, earnings per share declined from 1.22 cents last year to 0.66 cents this quarter.
5. Operating margin percentage weakened from 11.9% last year to 8.9% this quarter.
6. Year-to-date, SingPost generated free cash flow of S$62.1 million, up from S$32.0 million last year, mainly due to higher operating cash flow and reduction in capital expenditure.
7. As at 30 June 2018, SingPost’s borrowing stood at S$248.2 million while its cash and bank balances stood at S$377.6 million, giving it a net cash position of S$129.4 million. This was up from a net cash position of S$70.1 million as at 31 March 2018.
8. Postal segment’s revenue grew by 5.7% in the quarter. This was offset by lower revenue in the Logistics and e-Commerce segments. The latter were down by 2.2% and 4.3%, respectively, as compared to the same quarter last year.
9. The company proposed an interim dividend of 0.5 cent per ordinary share.
10. SingPost provided the following outlook guidance in its earnings release:
“The Group remains well-positioned to benefit from the strong growth in global eCommerce and last-mile deliveries.
Domestic mail volumes are expected to trend downwards. While international mail has grown due to cross-border eCommerce deliveries, transhipment competition continues to be intense and volumes may come under pressure, especially with higher terminal dues. As part of our mitigating measures, we are managing our revenue mix while keeping focused on margins and profitability.
The Group is integrating its eCommerce and Logistics businesses to derive synergy benefits. The US market remains challenging, and we continue to focus on our turnaround plan and the coming peak season.
We are executing a cost transformation program to optimise the Group’s cost base, for competitiveness in the eCommerce logistics space.”
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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 Lawrence Nga doesn’t own shares in any companies mentioned.