SINGAPORE: SingPost has attributed a net loss of S$75.1 million in its fourth quarter to equity holders, reversing from a net profit of S$31.8 million a year ago, according to results released by the postal service on Tuesday (May 7).
SingPost's results for the three months ended Mar 31 reflected the impairment charges for two loss-making US e-commerce subsidiaries.
Its net profit fell by 86 per cent to S$19 million from S$135.5 million a year ago, mainly due to impairment charges worth S$98.7 million for its US businesses, SingPost said.
The company’s underlying net profit declined 5.8 per cent to S$100.1 million in the last financial year, excluding the impact of exceptional and other one-off items. It would have closed 15.8 per cent higher excluding the US businesses, SingPost said.
The company's revenue for the fourth quarter decreased by 2.1 per cent to S$374.1 million as compared to the same quarter in the previous financial year.
Meanwhile, SingPost’s revenue rose by 2.9 per cent to S$1.56 billion in the last financial year, driven by growth from its post and parcel, and property, segments. Earnings in the post and parcel segment rose 4.1 per cent driven by growth in international mail.
Revenue for its property segment rose by 13.5 per cent with profit on operating activities increase by 29.8 per cent largely due to rental income from the SingPost Centre retail mall.
A final dividend of S$0.02 per share has been proposed by the board of directors.
EXITING US MARKET
SingPost has decided to put its US businesses up for sale and exit the US market, it said.
A total impairment of S$98.7 million was recorded to the carrying value of its US e-commerce subsidiaries TradeGlobal and Jagged Peak. This value comprises the balance of S$67.6 million for goodwill and intangible assets, and the balance of S$31 million for property, plant and equipment, SingPost said.
Revenue for its e-commerce segment also declined by 0.3 per cent as it faces challenges in the US, amid “intensifying competitive and cost pressures” as well as increase in customer bankruptcies in the industry, SingPost said.
“The Group expects to continue to account for operating losses on the US businesses until it completes its exit," the company said.
SingPost faced “increasingly intense challenges” in turning the US business around, said group CEO Paul Coutts.
“The Group’s competitive advantage lies in Asia Pacific where we are seeing the strongest growth in volumes and yields, and we will continue to refine our businesses to leverage the growth,” he said.
“In the immediate term, we continue to focus on improving our operations in Singapore to better serve the needs of customers in our home market.”