Singapore Post Ltd : SingPost records Q2 net profit of S$30.6M - Dividend remains at 1.25cts per share

SingPost Group's unaudited results

for the second quarter and half year ended 30 September 2011

- Dividend remains at 1.25cts per share

FINANCIAL HIGHLIGHTS

GROUP RESULTS

Revenue

Rental & Property- Related Income

Total Expenses

Net Profit

Underlying Net

Profit

Net Cash from

Operating Activities

Earnings per Share

Steady business performance as Group invests for future growth

• Higher revenues but lower profits from higher operating costs and investments in growth

SingPost Group revenue rose 2.4% to S$140.9 million in Q2 FY2011/12, on the back of improved performances in the Mail and Logistics segments.
Mail revenue increased 1.7% to S$93.8 million, on higher contributions from domestic mail, and international mail. In Logistics, revenue increased 10.8% to S$53.1 million, driven by growth in Quantium Solution's regional e-fulfilment activities, transhipment and vPOST shipping activities. Retail revenue held steady at S$17.0 million, as higher contributions from retail products and online store Clout Shoppe offset the decline in agency services and financial services following the sale of the SpeedCash business in March 2011.
Rental and property-related income increased by 6.3% to S$11.0 million with higher rental income from Singapore Post Centre.
The Group's total expenses in Q2 FY2011/12 amounted to S$111.8 million, an increase of
7.4%. Labour and related expenses were higher due to increases in salaries resulting from a tight labour market as well as investments in people, information technology and operations to drive growth.

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The Group's net profit declined 22.5% to S$30.6 million. Excluding one-off items, underlying net profit was S$32.8 million, a decrease of 10.1%.
Said Dr Wolfgang Baier, Group Chief Executive Officer of SingPost: "In spite of the mounting challenges in the postal industry, we managed to improve the performance in our core business of Mail and Logistics in the second quarter. Net profit for the Group was impacted by the higher cost of business including increased manpower costs due to the tight labour market, as well as investments to strengthen information technology, operations and capabilities to drive new business."

• Investing to transform SingPost

Dr Baier added: "The postal landscape is changing fast, and worldwide, many posts are struggling. It is just not enough to conduct business-as-usual. It is imperative that SingPost accelerates its transformation and diversification efforts to survive the changing postal landscape. We have to continue to invest in information technology and capabilities to support our growth plans."
"This will enable us to continue to fulfil and even exceed our social obligations as
Singapore's Public Postal Licensee and enhance shareholder value in the longer term."
"Structural changes in the postal industry, especially e-substitution, have resulted in challenges to the Group's business. SingPost has embarked on initiatives in digital services such as digital mailbox and hybrid mail as well as e-commerce and e-fulfilment."
"We have been building our logistics network in Asia Pacific with recent investments in a number of well-run logistics companies in the region, such as GD Express Carrier Berhad (GDEX) and Indo Trans Logistics Corporation (ITL), to strengthen our existing regional platform in Quantium Solutions."

• Quarterly interim dividend remains at 1.25 cents

Net cash from operating activities was lower at S$42.6 million, compared to S$46.3 million in the second quarter of last year.
The Board of Directors has declared an interim quarterly dividend of 1.25 cents per ordinary share (tax exempt one-tier) payable on 30 November 2011.

Review of First Half Performance

Group revenue rose 2.7% to S$283.2 million in the first half with higher contributions in all business segments. Mail revenue grew on the back of improvements in domestic mail and international mail. In Logistics, revenue growth was driven by Speedpost and e-fulfilment activities in Quantium Solutions, transhipment and vPOST shipping businesses. Retail revenue was higher as contributions from retail business and Clout Shoppe offset the drop in revenue from agency services and financial services.
Total expenses rose 6.7% to S$221.1 million in the first half of FY2011/12.
The Group's net profit was S$69.9 million, a decline of 12.9%. Excluding one-off items, underlying net profit amounted to S$69.7 million, a decline of 5.5%.

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End

(Reg. No. 199201623M)

Singapore Post Limited (SingPost) is a leading provider of mail, logistics and retail solutions in Singapore and the Asia Pacific region. It is the designated Public Postal Licensee (PPL) for Singapore providing domestic and international postal services as well as end-to-end mail solutions such as data printing, letter-shopping, delivery and mailroom management. As a logistics provider, SingPost offers domestic and international door-to-door delivery services, including express delivery (Speedpost) along with warehousing, fulfilment and distribution services. SingPost owns one of the largest retail distribution networks in Singapore with its extensive tri-channel network of over 60 post offices, 300- odd Self-service Automated Machines (SAM) and the online shopping and shipping portal vPOST. SingPost was listed on the Main Board of the SGX-ST on 13 May 2003. The company has won many awards and accolades. It is the only postal company in the world to have won the Express Mail Service (EMS) Cooperative Certification Gold Level Award by the Universal Postal Union for its Speedpost Worldwide Courier Service for 10 consecutive years since 2001. It was also named runners-up in the "Most Transparent Company Award 2010" for the fifth consecutive year in the SIAS Investors' Choice Awards.

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