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 eCommerce 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 eCommerce business into two parts, namely US businesses and SP eCommerce (eCommerce in Asia Pacific).
As a whole, we can see that the eCommence delivered weaker performance for both its revenue and operating profit.
Sales fell mainly due to declines in its US businesses which suffered from pricing pressure (lower price per order). In addition, margin was lower in US mainly due to a change in sales mix, and an increase in cost to support business integration efforts. All the above resulted in operating losses almost doubling from S$4.8 million last year to S$9.3 million in the latest quarter.
The company also provided an outlook for the business segment:
“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.