SingPost's first-half net profit falls 17.1% to S$18.4 million

SINGAPORE: Singapore Post’s net profit for the first half of its financial year fell by 17.1 per cent year-on-year to S$18.4 million (US$14.1 million), said the company on Monday (Nov 10). 

Announcing its unaudited results for the half year ending on Sep 30, SingPost said: "The decline was largely due to contributions from the divested Australia business in the prior period, which offset the exceptional gains in H1 FY25/26."

Revenue fell 27.4 per cent to S$188.4 million, which the company said was a reflection of “the challenging operating environment for the logistics business, particularly in cross-border ecommerce delivery volumes”.

The company said its efforts to streamline its operations post-divestment and cost discipline were reflected in lower operating expenses, which fell 25.5 per cent year-on-year to S$182.4 million. 

Labour and related expenses were lower by 10.9 per cent at S$92.8 million due to "streamlined operations", while volume-related expenses were lower by 58.6 per cent at S$31.6 million, mainly due to lower cross-border delivery volumes. 

In February, it laid off 45 employees from its corporate support units and international business unit as part of a "restructuring" exercise. 

SingPost said the restructuring was the result of "prolonged macroeconomic challenges facing the business, including intense competition".

Excluding exceptional items, the company's underlying net profit for the first half of the financial year fell 78 per cent year-on-year to S$5.5 million. This was due to changes in discontinued operations, it said. 

SingPost CEO Mark Chong said the company’s first-half performance “reflects the full impact of the streamlining of our business”. 

“This team has delivered a positive start to the first half, despite the persistent weakness in the global logistics and ecommerce sector. 

"We will continue to invest in our infrastructure to further enhance our service levels, while managing our cost base."

SEGMENTS

Since April, the company has adopted a new segment reporting structure after its reorganisation into three key business segments: logistics and letters, post office network, and property assets. 

“Prior period figures have been restated to align with this new structure,” said SingPost.

Two of the three segments saw revenue fall in the first half of the financial year. 

The logistics and letters segment, which encompasses domestic and international mail and parcel activities, including ecommerce logistics, saw revenue drop 33.1 per cent year-on-year to S$153.5 million.

“This was primarily due to a 63 per cent year-on-year decline in cross-border ecommerce delivery volumes, coupled with lower domestic ecommerce volume and the structural decline in letter mail,” said SingPost. 

Due to the lower revenue, the segment recorded an operating loss of S$4.4 million compared to a profit of S$13.7 million in the prior period. 

SingPost’s post office network revenue, derived from agency services and the sale of products, fell 13.9 per cent year-on-year to S$5.7 million. 

This was mainly due to lower revenue from agency services, partially offset by higher post office space rental, said SingPost.  

“The segment recorded a lower operating loss of S$5.8 million, an improvement from a loss of S$6.7 million in the prior period, attributed to the cessation of several post office operations," it added.

The company’s property assets segment recorded a 3.4 per cent year-on-year revenue increase to S$40.6 million, driven by higher rental income from SingPost Centre. 

The overall occupancy rate at SingPost Centre was higher at 99.2 per cent as of Sep 30, said the company. 

Operating profit was S$23.9 million, a slight decrease from S$24.7 million in the prior period, largely due to higher operating costs such as property management services and property tax.

SingPost's cash position as of Sep 30 was S$594.1 million.