SingPost reports 20.6% rise in Q3 profit

Consolidation of Quantium Solutions’ income lifts group revenue

SINGPOST turned in a better performance for the December quarter compared to a year ago, which it attributed to an improving economy, government relief measures and the consolidation of a new business, Quantium Solutions.

But its mail and logistics revenues fell, as a result of lower domestic mail and lower Speedpost revenues.

SingPost’s net profit attributable to equity holders for the third quarter ended Dec 31, 2009, improved 20.6 per cent to $44.1 million.

‘In tandem with the turnaround in the economy and with the benefits of the government’s relief measures, we have seen some recovery in the operating performance of the business,’ said Ng Hin Lee, deputy group CEO of SingPost. ‘This, coupled with the consolidation of our regional outfit, Quantium Solutions (formerly known as G3 Worldwide Aspac), enabled us to achieve a healthy set of results.’

Group revenue went up 12.7 per cent to $139.6 million, due mainly to the consolidation of revenue from Quantium Solutions. SingPost said that without the consolidation of Quantium, its revenues would have declined 0.6 per cent.

Its mail revenue dropped by 1.2 per cent to $94.4 million as a result of lower domestic mail and philatelic contributions. Thanks to the consolidation of revenue from Quantium, SingPost’s logistics revenue grew 166 per cent to $49.2 million; without that, its logistics revenue would have declined as a result of lower Speedpost revenue.

The group’s rental and property-related income rose 22.2 per cent to $10.2 million, thanks to higher rentals from its Singapore Post Centre and the leasing of space at the repurposed post office buildings.

Its earnings per share rose to 2.291 cents, from 1.899 cents the year before. And it declared an interim quarterly dividend of 1.25 cents per ordinary share, to be paid on Feb 26.

Going forward, the group said it’s cautiously optimistic about the business outlook and will remain vigilant on cost management.

SingPost said that Singapore was reclassified as a New Target Country, from a Developing Country, by the Universal Postal Union. Its operating costs would now rise due to the increase in its net terminal dues payments for international mailing. SingPost estimates the annualised impact to be around 5 per cent of underlying net profit. It said it has taken and will continue to take active measures to mitigate the effect.

‘It is imperative that we continue to be disciplined in reviewing our operations to improve efficiency and productivity even as we stay vigilant on costs. On the revenue front, we will focus on optimising our resources such as our retail network to achieve better yields,’ Mr Ng said.

SingPost said it’s maintaining its focus on expanding Quantium Solutions’ business beyond crossborder mail and extending its core competencies in the Asia-Pacific.