SingPost’s full year revenue crosses S$1 billion milestone…

Company Profiles, IT and Communications, Logistics, Reports — By on May 10, 2016 at 12:38 PM

Singpost logoSingPost’s full year revenue crosses S$1 billion milestone, with net profit achieving record high of S$248.9 million

Financial year ended 31 March 2016

  • Revenue increased 25.2 per cent to S$1.15 billion, driven by eCommerce-related activities and acquisitions
  • Net profit jumped by 57.9 per cent  to S$248.9 million, boosted by one-off divestment gains
  • Underlying net profit declined by 4.1 per cent to S$153.6 million
  • eCommerce-related revenue increased significantly by 60.4 per cent year-on-year to S$412.4 million, representing 35.8 per cent of group revenue
  • Proposed final dividend of 2.5 cents per share, bringing total full year payout to 7 cents per share

Fourth quarter ended 31 March 2016

  •  Revenue grew 27.7 per cent to S$317.6 million
  •  Net profit rose 196.4 per cent  to S$105.4 million, boosted by one-off divestment gains

Financial Highlights

 

Full Year FY15/16 (S$’000)

Full Year

FY14/15 (S$’000)

*restated

Variance (%)

Q4 FY15/16 (S$’000)

Q4 FY14/15 (S$’000)

*restated

Variance (%)

GROUP RESULTS
Revenue

1, 151, 542

919, 582

25.2

317, 579

248, 709

27.7

Rental & property-related income

39, 373

43, 890

(10.3)

9, 486

10, 874

(12.8)

Total expenses

(1, 033, 946)

(789, 369)

31.0

(296, 884)

(224, 703)

32.1

Operating profit

284, 259

186, 365

52.5

107, 465

37, 191

189.0

Net profit

248, 910

157, 611

57.9

105, 379

35, 554

196.4

Underlying net profit

153, 568

160, 179

(4.1)

31, 796

39, 815

(20.1)

Earnings per share

10.86 cents

6.85 cents

4.36 cents

1.49 cents

SINGAPORE, 10 May 2016 – Singapore Post Limited (“SingPost”) today announced its financial results for the full year and fourth quarter ended 31 March 2016.

SingPost’s continued focus on strengthening its eCommerce logistics capabilities and business is driving its revenue growth. For the first time, SingPost’s revenue surpassed S$1 billion, while net profit hit a record high of S$248.9 million. Revenue grew 27.7 per cent in Q4 and 25.2 per cent in the full year, with continued growth in eCommerce-related activities and the inclusion of new subsidiaries.

Net profit grew 196.4 per cent in Q4 from S$35.6 million to S$105.4 million, and rose 57.9 per cent for the full year from S$157.6 million to S$248.9 million, boosted by one-off divestment gains. Excluding the one-off items, Underlying Net Profit declined 20.1 per cent for Q4, and was down 4.1 per cent for the full year. This was due largely to the reduction in rental income as the Singapore Post Centre (SPC) is being redeveloped, and higher finance expenses.

If the impact of the reduction in income from the SPC mall redevelopment and the deconsolidation of subsidiaries divested during the year were excluded, Underlying Net Profit for FY2015/16 would have been stable.

eCommerce Logistics Laying Ground for Future Growth

eCommerce-related revenue made up 35.8 per cent of full year revenue, boosted by greater traffic volumes and activities, including mergers and acquisitions.

In Logistics, operating profit increased 132.9 per cent in Q4 and 75.0 per cent for the full year, with contributions from new subsidiaries and increased eCommerce logistics activities, as well as improved operating efficiency with the integration of new subsidiaries into the Group’s eCommerce logistics network. For the full year, Logistics operations revenue increased by 34.7 per cent to S$626 million.

In the Mail segment, revenue increased 3.3 per cent in Q4 despite the cessation of revenues from subsidiaries which were divested in the first half of the year. Mail revenue declined marginally for the full year. Excluding the impact of the divestments, Mail revenue would have grown by 13.4 per cent in Q4 and 6.7 per cent for the full year. This was largely driven by higher International mail revenue as a result of increased cross-border eCommerce-related deliveries.

The increase in Retail and eCommerce revenue for the full year was attributable to growth in eCommerce revenue as well as the recent acquisitions of new US subsidiaries Trade Global and Jagged Peak.

Rental and property-related income decreased 12.8 per cent in Q4 and 10.3 per cent for the full year. This was due to the reduction in rental income as SPC undergoes redevelopment.

As SingPost deepens its overseas footprint, overseas revenues in FY2015/2016 rose to 43.9 per cent of Group revenue, compared to 32.5 per cent last financial year.

Stable Cash Flows Enhancing Long Term Shareholders Returns

Total expenses increased 32.1 per cent in Q4 and 31.0 per cent for the full year, with growth in business volumes and changes in business mix.

Operating profit grew 189.0 per cent in Q4, with one-off divestment gains from GD Express and TrucksFirst and higher contributions from the Logistics segment. For the full year, operating profit included one-off gains totalling S$112.1 million, mainly from the divestment of subsidiaries and associates.

Cash generated from operations remained resilient. Operating cash flow before working capital changes was S$202.0 million for FY2015/16. Working capital changes were due mainly to higher receivables from growth in international eCommerce volumes. Cash used for investing activities for the full year was S$457.0 million, mostly for the strategic acquisitions of subsidiaries as well as the construction of the eCommerce Logistics Hub and the new retail mall development at Singapore Post Centre.

As at 31 March 2016, the Group’s cash and cash equivalents stood at S$126.6 million. The Group was in a net debt position of S$153.6 million. This was due to investments in strategic acquisitions and capital expenditure.

Results of Ongoing Transformation Heartening

Mr Mervyn Lim, Deputy Group Chief Executive Officer (Corporate Services) and Group Chief Financial Officer, said: “SingPostembarked on a transformation journey more than ten years ago to future-proof our business and we are seeing results. SingPost’s solid postal foundation paved the way for the company to pioneer eCommerce logistics in this part of the world and we successfully pivoted into the US with the completion of the Trade Global and Jagged Peak acquisitions in November 2015 and March 2016 respectively.”

Mr Lim added: “As a result of our transformation strategy, Group revenue crossed a significant S$1 billion milestone and our overseas revenue grew to 43.9 per cent.”

As SingPost continues its transformation and strengthens its eCommerce logistics capabilities, the Group will focus on post-merger integration and extracting synergies from the recent acquisitions.

Final Dividend

Given the Group’s steady cash flows, the Board of Directors is recommending a final dividend of 2.5 cents per share for the financial year ended 31 March 2016. Together with interim dividend payments of 1.5 cents per share for each of the first three quarters, the annual dividend in respect of the current financial year would amount to 7 cents per share. The proposed final dividend is subject to shareholders’ approval at the Annual General Meeting in July 2016.

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