Weak domestic parcels threaten SingPost growth: analysis

How it will affect SingPost’s inbound and transshipment mail remains to be seen.

Declines in domestic letter volumes will continue to challenge Singapore Post’s growth as people are migrating to electronic messaging, a DBS Equity Research said.

The company’s operating profit for Q2 declined 22.2% YoY to S$38.7m as all segments except property saw declines in operating profit. Underlying net profit also dropped 4.6% YoY to $26.8m.

Also read: SingPost profits up 10.3% to $27.73m in 2019

SingPost stated that its domestic revenue fell due to an accelerated decline in business letter volumes and reduction in admail volumes. The rate of decline in business letters has reportedly accelerated in the last two quarters as structural trend of e-substitution continues.
Terminal dues are also bound to surge by FY20-21, although its impact to SingPost’s inbound and transshipment mail remains unclear, said analysts Rui Wen Lim and Sachin Mittal.

However, the recent increase in international mail rates and changes in domestic postal products will guide the company “in the right direction” as these may subsidise the added charge in terminal fees and lessen the burden of doorstep package deliveries.

Meanwhile, freight forwarding will continue to dampen logistics performance due to global slowdown caused by the ongoing trade war, the analysts concluded.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia