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eCommerce segment saw operating losses rise as US impacted by pricing pressures
Singapore Post Limited (SingPost) announced its results for the second quarter ended 30 September 2018. Revenue for the quarter increased 2.2% to S$368.7 million, on stronger contributions from international mail and property. Net profit attributable to equity holders decreased 12.9% to S$25.1 million, due largely to an exceptional fair value loss on warrants from an associated company. Excluding such one-off items, underlying net profit was stable at S$28.1 million, as improved operating profit, which rose 33.5% to S$40.0 million, was offset by negative contributions from associates investing for growth.
SingPost continued to make progress in its transformation. Revenue from eCommerce-related activities across the Group rose 2.2% in the quarter to S$189.1 million, or 51.3% of total revenue.
In the Post and Parcel segment, revenue increased on growth in cross-border eCommerce deliveries, while profit on operating activities rose 5.1%, driven by higher margins from last-mile eCommerce deliveries in Singapore. The Group is starting to reap operating synergies from the ongoing integration of its postal and parcel delivery networks.
The Logistics segment reversed a loss in the previous year to record an operating profit on flat revenue. The continued turnaround was due largely to reduced losses at Quantium Solutions, which has been reviewing unfavourable customer contracts to improve profitability, and strong contributions from the freight forwarding business.
The eCommerce segment saw operating losses rise as the US Businesses were impacted by pricing pressures. Costs also increased due to ongoing initiatives to integrate TradeGlobal and Jagged Peak, as well as investments in automation.
Profit on operating activities from Property rose 54.1%, boosted by rental income from the SingPost Centre retail mall, which re-opened in October 2017. Committed occupancy for the mall improved to 99.0% as at 30 September 2018, from 97.0% as at 30 June 2018.