SingPost Q1 operating profit up 55.2% to $4.1 million on improved costs
The growth was driven primarily by cost management, lower labour-related costs and efficiency gains.
Singapore Post (SingPost) reported a significant increase in its operating profit for the first quarter ended June 30, 2023. Operating profit rose 55.2% to $4.1 million, up from $2.6 million in the same period last year. The improvement was attributed to effective cost management, reduced labor expenses, and operational efficiency gains. The operating profit margin expanded to 4.4% from 2.8% a year earlier.
Despite a slight dip in overall revenue, SingPost's performance was bolstered by gains in its post-office network and property-assets segments. Domestic parcel volume increased 36.5% year-on-year, offsetting declines in mail volume and international business challenges. Domestic mail volume fell 16.2% to 67.3 million items, but this was partially compensated by a postage uprate implemented in January.
Operating expenses decreased by 2.4% year-on-year to $89.3 million from $91.5 million, with rising fuel costs from an oil price shock partially offset by route optimization, fleet electrification, and electricity cost hedging. In July, SingPost launched a $30 million automated parcel sortation facility at its regional e-commerce logistics hub, aimed at further reducing cost to serve.
In the post-office network segment, performance improved due to transaction support services provided for Singtel Special Discounted Shares and higher rental yields from post-office properties. SingPost Centre achieved full occupancy as of June 30, up from 97.8% a year earlier. The company also appointed an architect to advise on a potential asset refresh for SingPost Centre.
As of June 30, SingPost had $664.4 million in cash and cash equivalents, up from $603.8 million as of March 31, bolstered by a $52.8 million inflow from the sale of Housing Board post-office shops. The group maintained a net cash position of $314.7 million. Borrowings remained flat at $349.7 million, while total equity increased to $1.48 billion from $1.43 billion as of March 31. SingPost shares closed down 2.9% to 33 cents on August 25.
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