Singapore Post - CGS-CIMB Research 2024-02-08: Navigating Industry Headwinds

• 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

• - Read this at SGinvestors.io -

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.
• - Read this at SGinvestors.io -
• 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
  1. continued easing of air conveyance costs and
  2. 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.

ONG Khang Chuen CFA CGS-CIMB Research | https://www.cgs-cimb.com 2024-02-08 SGinvestors.io

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