Singapore Post

[CityFarmer]

Well, parcel delivery is quite diff from mail delivery. Mail delivery is one stop at mail boxes for one block, while parcel is house base. Delivery to POPStation is quite similar to mail, one stop for an area.

SMS and email can be automated easily.

Labor cost is the largest expense of SingPost, more than 30% of revenue. Mail delivery is probably the least productive among them.

I believe it will take some time to see the results, they are only piloting at 5 locations for now. End of the day, customers must be able to benefit from it for this to work. Choosing between having the parcel delivered to your doorsteps or having to go out and self collect yourselves, if the price is the same, which would you choose? For those who are seldom at home and always have to go to a post office to collect the parcel, this new option might works.

As for labor cost, is 30% of revenue referring to just postman costs or total labor costs? I believe postman does not earns a high salary, so the net saving may not be significant if we were to less off the investment needed such as IT, extra delivery vans and its maintenance, rental etc.

Having said all these, I agree this is a push towards productivity, and I do hope it will be successful.

30% is overall labor expense, including CEO pay

Agree the effect is yet to be observed with a starting point of only 5 locations. It has to be win-win to success.

IIRC, in AGM, the new CEO does highlight the labor expense, especially the postman expense which is the key focus on the productivity drive.

[CityFarmer]

Postmen: New Integrated Sorting Machines Will Help Maintain Quality
Mail Service

Singapore, 30 April 2013 - As SingPost continues to transform to better meet its
customers’ changing demands, it remains committed to maintaining quality mail service.
To ensure that Singapore continues to enjoy good service, SingPost is investing about
S$45 million to upgrade its mail sorting infrastructure. All existing 26 sorting machines,
which have been in operation for more than 14 years, will be replaced with an integrated
sorting system comprising 16 various machines that can sort letters, packets and
publications.

http://info.sgx.com/webcoranncatth.nsf/V...D003ED63F/$file/PressRelease.pdf?openelement

[CityFarmer]

I have yet to dig further into the report. In brief, the mail revenue is transitioning well from paper mails to package mails, which resulted a overall increase in mail revenue ex new acquisition.

Singapore Post posts 14.6% fall in Q4 net to $26.1 mil

Singapore Post says it achieved a net profit of $26.1 million for the fourth quarter ended 31 March 2013, down 14.6% from a year ago. Earnings per share fell to 1.185 cents. Full year net profit declined 3.9% to $136.5 million.

Overall revenue grew 25.0% to $182.4 million in Q4, with the consolidation of newly acquired subsidiaries as well as contributions from e-commerce related activities across all business segments. Contributions from new subsidiaries included Novation Solutions which was acquired in May 2012, General Storage Company in January 2013, and Famous Holdings in February 2013. Full year revenue grew 13.9% to $658.8 million.

http://www.theedgesingapore.com/the-dail...1-mil.html

[KopiKat]

I have yet to dig further into the report. In brief, the mail revenue is transitioning well from paper mails to package mails, which resulted a overall increase in mail revenue ex new acquisition.

Singapore Post posts 14.6% fall in Q4 net to $26.1 mil

Singapore Post says it achieved a net profit of $26.1 million for the fourth quarter ended 31 March 2013, down 14.6% from a year ago. Earnings per share fell to 1.185 cents. Full year net profit declined 3.9% to $136.5 million.

Overall revenue grew 25.0% to $182.4 million in Q4, with the consolidation of newly acquired subsidiaries as well as contributions from e-commerce related activities across all business segments. Contributions from new subsidiaries included Novation Solutions which was acquired in May 2012, General Storage Company in January 2013, and Famous Holdings in February 2013. Full year revenue grew 13.9% to $658.8 million.

http://www.theedgesingapore.com/the-dail...1-mil.html

My initial reaction was, It looks bad! Just looking at EPS vs DPS, the payout is 97%! If this goes on, they'll have to cut the DPS! On closer examination, the main culprit is due to,

Write-off of intellectual property rights = $5,798,000

Add this non-cash item back and we should get very similar EPS as last year. But, yes, it's still a valid concern for shareholders as Revenue is +13.9%, meaning Profit Margins continue to be eroded.

One item which'll likely help with the bottomline from next Q would be the expiry of their $300M 3.13% 10-Year Bond in Apr-13. That ought to lower their Interest Expenses by a couple of Mil$ / Q. Cash will of course be reduced by $300Mil next Q.

[CityFarmer]

I have yet to dig further into the report. In brief, the mail revenue is transitioning well from paper mails to package mails, which resulted a overall increase in mail revenue ex new acquisition.

Singapore Post posts 14.6% fall in Q4 net to $26.1 mil

Singapore Post says it achieved a net profit of $26.1 million for the fourth quarter ended 31 March 2013, down 14.6% from a year ago. Earnings per share fell to 1.185 cents. Full year net profit declined 3.9% to $136.5 million.

Overall revenue grew 25.0% to $182.4 million in Q4, with the consolidation of newly acquired subsidiaries as well as contributions from e-commerce related activities across all business segments. Contributions from new subsidiaries included Novation Solutions which was acquired in May 2012, General Storage Company in January 2013, and Famous Holdings in February 2013. Full year revenue grew 13.9% to $658.8 million.

http://www.theedgesingapore.com/the-dail...1-mil.html

My initial reaction was, It looks bad! Just looking at EPS vs DPS, the payout is 97%! If this goes on, they'll have to cut the DPS! On closer examination, the main culprit is due to,

Write-off of intellectual property rights = $5,798,000

Add this non-cash item back and we should get very similar EPS as last year. But, yes, it's still a valid concern for shareholders as Revenue is +13.9%, meaning Profit Margins continue to be eroded.

One item which'll likely help with the bottomline from next Q would be the expiry of their $300M 3.13% 10-Year Bond in Apr-13. That ought to lower their Interest Expenses by a couple of Mil$ / Q. Cash will of course be reduced by $300Mil next Q.

The NPM is a major concern, and the success of expense control initiatives are the only hope to maintain or increase NPM.

The fate of the M&A is still unknown, and full of uncertainty. I had chosen to divest months ago and wait for re-entry opportunity.

Let's see the progress... and wish good luck to Dr. Wolfgang Baier.

(not vested)

[felixleong]

Mail volume and net profits are declining, I worry if the distributions are sustainable or not.

[CityFarmer]

Mail volume and net profits are declining, I worry if the distributions are sustainable or not.

5-years (08-12) average FCF was $168 mil, while annual dividend payout was $120 mil in FY2012, so approx 70%+ payout ratio to FCF.

IMO, it will sustain for a while.

[Musicwhiz]

The Straits Times
www.straitstimes.com
Published on May 07, 2013
SingPost's Q4 profit slips 14.6% amid challenging times
It needs more revenue from other business streams to stay competitive

By Magdalen Ng

AS THE postal environment continues to be challenging, Singapore Post has to derive more revenue from its other business streams to remain competitive, said chief executive Wolfgang Baier.

The national postal service provider yesterday posted a fourth- quarter profit of $26.1 million, down 14.6 per cent from a year ago. This was despite 25 per cent revenue growth for the quarter ended March 31 from the same period last year to $182.6 million.

There was broad-based revenue growth across the four main business streams, including mail, despite the sixth consecutive quarter of decline in domestic mail volume. Mail revenue was up 9.8 per cent in the fourth quarter to $105.8 million, accounting for 57.9 per cent of total revenue, as growth in domestic and international e-commerce packets offset the mail volume decline.

"Mail volume is expected to decline by 30 per cent by 2018, while the number of households will increase by 30 per cent, which will impact revenue by about 50 per cent," he said.

Rental and property-related income was up 12.5 per cent to $11.2 million, while revenue from the logistics business was up 11.2 per cent to $60 million.

The rising costs of doing business in Singapore, continued investments and consolidation of new businesses saw expenses up 32.4 per cent to $163.8 million.

For the full year, profits were down 3.9 per cent to $136.5 million. Total revenue was up 13.9 per cent to $658.8 million, but expenses were up 19.1 per cent to $546.9 million. Excluding one- off items, underlying net profit grew 4.1 per cent to $141 million.

Dr Baier said the global postal industry is under tremendous pressure, as SingPost faces a rapidly changing and challenging landscape amid rising costs.

"Inflationary cost increases continue to impact our business despite the group's mitigating measures which included raising productivity and optimising resources and operations," he said.

SingPost said in February that it was investing more than $100 million over the next few years to raise productivity, improve service standards, and to support productivity training for staff and provide assistance to those with school-going children. He added: "We have been prudent in spending only in areas that contribute directly to either service improvement or revenue growth."

SingPost is proposing a final dividend of 2.5 cents per share for the full-year period. This brings the proposed total dividend for the full year to 6.25 cents per share. Earnings per share for the quarter fell to 1.186 cents from 1.553 cents a year ago, while net asset value per share as of March 31 was 35.29 cents, up from 34.93 cents a year ago.

SingPost's counter closed unchanged at $1.29 yesterday.

songyuan@sph.com.sg

[greengiraffe]

SingPost is one of the TINA stock purely due to historical track record of good dividends - clearly over paying for "certainties" will eventually result in busting of bubbles.

The Straits Times
www.straitstimes.com
Published on May 07, 2013
SingPost's Q4 profit slips 14.6% amid challenging times
It needs more revenue from other business streams to stay competitive

By Magdalen Ng

AS THE postal environment continues to be challenging, Singapore Post has to derive more revenue from its other business streams to remain competitive, said chief executive Wolfgang Baier.

The national postal service provider yesterday posted a fourth- quarter profit of $26.1 million, down 14.6 per cent from a year ago. This was despite 25 per cent revenue growth for the quarter ended March 31 from the same period last year to $182.6 million.

There was broad-based revenue growth across the four main business streams, including mail, despite the sixth consecutive quarter of decline in domestic mail volume. Mail revenue was up 9.8 per cent in the fourth quarter to $105.8 million, accounting for 57.9 per cent of total revenue, as growth in domestic and international e-commerce packets offset the mail volume decline.

"Mail volume is expected to decline by 30 per cent by 2018, while the number of households will increase by 30 per cent, which will impact revenue by about 50 per cent," he said.

Rental and property-related income was up 12.5 per cent to $11.2 million, while revenue from the logistics business was up 11.2 per cent to $60 million.

The rising costs of doing business in Singapore, continued investments and consolidation of new businesses saw expenses up 32.4 per cent to $163.8 million.

For the full year, profits were down 3.9 per cent to $136.5 million. Total revenue was up 13.9 per cent to $658.8 million, but expenses were up 19.1 per cent to $546.9 million. Excluding one- off items, underlying net profit grew 4.1 per cent to $141 million.

Dr Baier said the global postal industry is under tremendous pressure, as SingPost faces a rapidly changing and challenging landscape amid rising costs.

"Inflationary cost increases continue to impact our business despite the group's mitigating measures which included raising productivity and optimising resources and operations," he said.

SingPost said in February that it was investing more than $100 million over the next few years to raise productivity, improve service standards, and to support productivity training for staff and provide assistance to those with school-going children. He added: "We have been prudent in spending only in areas that contribute directly to either service improvement or revenue growth."

SingPost is proposing a final dividend of 2.5 cents per share for the full-year period. This brings the proposed total dividend for the full year to 6.25 cents per share. Earnings per share for the quarter fell to 1.186 cents from 1.553 cents a year ago, while net asset value per share as of March 31 was 35.29 cents, up from 34.93 cents a year ago.

SingPost's counter closed unchanged at $1.29 yesterday.

songyuan@sph.com.sg

[NTL]

Got this feeling that Singpost is following SMRT's path...