SingPost reports FY2023 earnings of $24.7 mil, 70.3% lower y-o-y despite record revenue

The board is recommending a final dividend of 0.4 cents per share for the FY.

Singapore Post (SingPost) S08 has reported earnings of $24.7 million for the FY2023 ended March 31, 70.3% lower y-o-y.

For the 2HFY2023, the group’s earnings fell by 28.0% y-o-y to $34.6 million.

Earnings per share (EPS) for the FY2023 stood at 0.62 cents, down from 3.09 cents in the FY2022 while EPS for the 2HFY2023 stood at 1.30 cents, down from 1.86 cents in the same period the year before.

While revenue for the FY2023 stood at a record $1.87 billion, which grew by 12.4% y-o-y, the group’s bottom line was dragged by higher operating expenses, lower other income, lower share of profit from associated companies and joint ventures (JVs) and a loss in exceptional items compared to the profit in the year before. In particular, the Post & Parcel segment recorded a full year loss of $15.9 million due to the decline in delivery volumes coupled with inflationary increases in labour, utility, fuel and conveyance expenses.

The revenue growth was attributed to the Australian logistics business, which mitigated the declines in revenues from Post & Parcel and freight forwarding businesses. Through the group’s transformation programme, about 86% of the group’s revenue is now generated internationally through both organic and inorganic growth.

Total operating expenses for the year increased from higher labour and related expenses, administrative expenses, depreciation and amortisation expenses as well as selling-related expenses.

Other income fell by 39.0% y-o-y to $4.1 million mainly due to a decrease in trade-related foreign exchange gains.

Share of profit of associated companies and JVs plunged by 99.5% y-o-y to $23,000 as the bulk of it was from FMH when it was an associated company. Following SingPost’s increase in FMH, which made the latter a subsidiary of the group, share of profit was less significant. During the period, contributions from associated companies in Hong Kong and Vietnam offset declines from associated companies in Malaysia.

Exceptional items stood at a $7.7 million loss, down from the exceptional gain of $1.9 million in the year before. The loss was largely attributable to a fair value charge of $21.7 million arising from a higher put option redemption liability on FMH as a result of a higher valuation of the company. This was partly offset by fair value gain on investment properties of $18.6 million. The exceptional gain of $16.3 million in the 2HFY2023 was largely due to the fair value gain on investment properties.

For the period, the board is recommending a final dividend of 0.4 cents per share. Including the interim dividend of 0.18 cents per share, SingPost’s total dividend would amount to 0.58 cents per share, or around 40% of its underlying profit.

The proposed final dividend is subject to shareholders’ approval at the group’s next annual general meeting (AGM).

As at March 31, cash and cash equivalents stood at $495.7 million, 93.4% higher y-o-y.

“In the first phase of our transformation, we have focused on building a sustainable integrated logistics business, expanding into Australia and developing our international cross-border eCommerce logistics business. Our performance in Australia reflects our growth momentum and successful execution of our strategy,” says Vincent Phang, SingPost’s group CEO.

In its outlook statement, the group says it is “well positioned in high growth markets with the scope for further transformational investment”. It adds that its board has initiated a strategic review of its portfolio of businesses to enhance shareholder returns and to ensure the group is “appropriately valued”.

Shares in SingPost closed at 51.5 cents on May 10.

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