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
