MENU

Singapore Post Limited’s Latest Earnings: What Investors Should Know About Its Postal Business

In early August, Singapore Post Limited (SGX: S08) or SingPost released its first quarter results for the financial year ending 31 March 2019 (FY18/19).

As a quick introduction, SingPost is a mail and logistics company, organised into four major segments of post and parcel, logistics, eCommerce and property. Today, we will take a closer look at its the performance of its post and parcel business. To start, let’s take a quick overview of the key numbers for the business segment.

Source: SingPost’s Result Presentation

From the above, we can see that SingPost has further categorised its post and parcel business into four parts, namely domestic mail, international mail, SP parcels and post office products and services.

As a whole, we can see that the business segment delivered a mixed performance, posting higher sales but lower operating profits for the quarter. The growth in revenue for was driven by higher revenue from international mail and SP parcels, benefiting from eCommerce deliveries for cross-border and domestic Singapore.

Despite higher revenue, operating profit fell by 3.8% year-on-year. Sales fell for its higher margin domestic mail while the higher sales from international mail came with lower margins. The decline was offset by growth in last-mile deliveries.

In term of outlook for the segment, the company provided the following guidance:

“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.”

Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  

The Motley Fool’s purpose is to help the world invest, better. Like us on Facebook  to keep up-to-date with our latest news and articles.

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.