SingPost (SGX:S08)’s 3QFY24 EBIT of S$28m (+42% q-o-q, -18% y-o-y) was slightly below expectations, with 9MFY24 EBIT coming in at 68%/73% of our/Bloomberg consensus FY24F.
Freight forwarding and forex remain key drags
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Post & Parcel segment saw EBIT improvement y-o-y
Domestic segment revenue and EBIT both saw y-o-y improvements in 3QFY3/24 with the postage adjustment implemented in Oct 2023. SingPost has not seen significant letter volume declines despite the ~65% rate hike. Meanwhile its e-commerce volumes grew by 16% y-o-y in 3QFY3/24 with new customer acquisitions and improved wallet share.
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For the international business, slowdown in global trade impacted SingPost’s cross border volumes in 3QFY24 (-12% y-o-y), but segment EBIT improved y-o-y on
continued easing of air conveyance costs and
margin uplift stemming from a greater focus on commercial offerings.
With the launch of SingPost’s digital 4PL platform in Nov 2023, we believe the share of commercial revenue in the international business (currently ~30%) can continue to improve.
Navigating headwinds in the logistics segment
Read more at SGinvestors.io.
Above is the excerpt from research report by CGS-CIMB. Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
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