Singapore Post’s latest quarterly financial results suggest a post office in the midst of a transformation. For the period ending June 30, group revenue increased almost 33.0% to S$201.3m ($158.8m USD). An impressive increase compared to same period 2012. However, total expenses increased 39.4% to S$165.8m ($130.9m USD) resulting in a 2.0% decline in net profit, S$ 36.2m ($28.6m USD). Concerning? Perhaps, but then again this is a company that has undergone many transformations since its inception in 1819.
Over the past few years, Singapore Post has made numerous acquisitions across the region to expand its service offerings in logistics, ecommerce and digital services to name a few. As a result of acquisitions, investments and new services, its reach spans over 200 countries.
For its main divisions, quarterly revenue either increased or was flat. For example, Mail revenue increased 13.7% to S$114.7m ($90.5m USD) thanks to the growth in international ecommerce package growth and its acquisition of Novation Solutions, a provider of digital mail solutions. Not surprising domestic letter mail volume declined, the 7th consecutive quarter of declines.
Logistics revenue was S$93.8m ($74.0m USD). Recently acquired freight forwarding company Famous Holdings and Lock + Store along with increases in regional e-fulfillment services attributed to revenue.
Its retail and ecommerce segment reported revenue of S$20.8m ($16.4m USD), no growth as compared to same period in 2012. While its ecommerce companies such as vPost, Clout Shoppe and SP ecommerce services grew, its financial and retail services slowed.
Singapore Post’s latest financial results indicate that although expenses greatly increased, these were attributed to the numerous investments and acquisitions the company has made in order to diversify its service offerings. While Mail still represents over 50% of the total revenue at 53.3%, that is down from 63.3% of total revenues in 2012. Logistics, however, is gaining ground quickly and now makes up 39.5% of total revenue compared to 27.5% in 2012.
Like many other post offices around the world, the rise of ecommerce has benefited Singapore Post and is an integral part of its strategy. Transport Intelligence estimates the Asian Pacific ecommerce logistics market is valued at over $83.1bn (USD) with Southeast Asia making up about 11.0% of the total region’s ecommerce logistics market.
While there is great opportunity in ecommerce logistics, Singapore Post will need to be mindful of rising expenses and increasing competition from other logistics and small parcel providers.
1 Singapore Dollar= $0.789 US Dollar