SingPost reports S$75.1 million net loss for Q4 on impairment charges

Mail and logistics services provider Singapore Post Limited (SingPost) reported a S$75.1 million net loss for the fiscal fourth quarter ended March 31, a reversal from the net profit of S$31.8 million a year ago, due to impairment charges for two loss-making ecommerce firms in the United States (US).

Net profit attributable to equity holders sank by 86% to S$19 million, due to the one-off impairment charges of the US businesses. Underlying net profit fell by 6.1%, because of the weaker performance its US businesses. The group’s revenue for the three months fell by 2.1% to S$374.1 million.

The firm reported a loss per share of 3.50 Singapore cents for the quarter, compared to an earnings per share of 1.24 Singapore cents previously.

A final dividend of two Singapore cents has been recommended by the board, which is unchanged from the previous year, to be paid out on August 7, pending approval from shareholders. Annual dividend for the financial year stands at 3.5 Singapore cents per share.

SingPost’s shares slumped 1.96% or 2 Singapore cents to S$1.00 at around 10am Singapore time on Tuesday morning, following the earnings results announcement.

Full-year revenue up by 2.9%, on growth in the post and parcel, and property segments

For the full financial year, group revenue increased by 2.9% to S$1.56 billion, supported by growth in the post and parcel, and property segments.

Excluding the US businesses, SingPost said that its underlying net profit would have closed 15.8% higher for the full year.

Revenue for the group’s post and parcel segment rose by 4.1% for the full year, supported by strong international mail revenue growth and a rise in cross-border ecommerce-related delivery volumes, the group said.

Meanwhile, its property segment revenue gained by 13.5%, largely due to rental income from the group’s SingPost Centre retail mall, which hit a committed occupancy of 98.9% as of March 31, an increase compared to the 95.6% occupancy a year ago.

The group’s logistics and ecommerce segments each fell in revenue by 0.3%, respectively.

For the logistics segment, the drag was caused by a revenue fall in the exit of unfavourable customer contracts for Quantium Solutions and the strengthening of the Singapore Dollar against the Australian dollar for CouriersPlease.

The ecommerce segment continues to face challenges in the US in the midst of intensifying competitive and cost pressures, and an increase in customer bankruptcies in the industry, the firm said. Loss on operating activities widened to S$51.9 million for the full year.

Exiting the US market

SingPost has decided to exit the US market following a strategic review and have put up its businesses there for sale.

The firm said it has recorded a total impairment of S$98.7 million to the carrying value of TradeGlobal and Jagged Peak, comprising the balance of S$67.6 million for goodwill and intangible assets, and the balance of S$31.0 million for property, plant and equipment.

It added that it expects to continue to account for operating losses on its US businesses until its exit is completed, and will update shareholders in further announcements on the exit.

‘The group believes its strengths and strategic competitive advantages are in Southeast Asia and Asia Pacific, which would provide attractive growth opportunities and better returns on investments,’ it said.