SINGAPORE POST LIMITED (SGX:S08)
Singapore Post - More Time Needed
- Full year dividend of S$0.011 was declared.
- eCommerce contributed to 65% of total revenue.
- COVID-19 related disruptions weighed on Post & Parcel’s performance.
FY21 results missed expectations
- SingPost (SGX:S08)’s FY21 revenue rose 6.9% y-o-y to S$1404.7m, mainly attributable to strong eCommerce volume growth in the Logistics and Domestic Post & Parcel segments, but partially offset by lower International Post & Parcel revenue. PATMI and underlying net profit, however, fell 47.7% and 40.4% y-o-y to S$91.1m and S$100.2m respectively, dragged by higher operating expenses due to COVID-19, below expectations.
- A final dividend of 0.6 cents per share was declared. Together, SingPost's total dividend for FY21 dropped 59% y-o-y to 1.1 cents per share, representing a payout ratio of 40% of underlying net profit (vs. payout ratio of 60% in FY20).
Margins eroded by COVID-19 related costs
- The Post & Parcel segment’s revenue and operating profit declined 2.7% and 63.7% y-o-y to S$742.8m and S$43.5m respectively in FY21. International Post and Parcel’s volume and margin continued to be weighed by airfreight disruption due to COVID-19.
- Despite strong eCommerce volume and revenue growth, Domestic Post and Parcel’s performance was dragged down by a decline in volumes of letter and printed papers and higher COVID-19 related costs.
- Strong eCommerce also benefitted the Logistics segment which saw revenue rising 23.5% y-o-y and operating profit turning from a loss in FY20 to a gain of S$11.3m this year.
Tenant sales have recovered to 85% of pre-pandemic levels
- Separately, the Property segment’s revenue and operating profit was down 4.7% and 7.2% y-o-y to S$115.4m and S$50.0m, largely due to the provision of S$3.2m of rental rebates to eligible tenants, and lower receipts from carpark and atrium sales.
- Moving ahead, we expect margins to remain under pressure due to slow air capacity recovery at Changi Airport which has caused conveyance costs to surge ~2x and SingPost may be unable to pass the costs to its customers.
- We also expect negative rental reversions at SingPost Centre in FY22 due to weak business sentiment.
- After adjustments, we keep our fair value estimate at S$0.74 for SingPost.
- See
Chu Peng
OCBC Investment Research
|
https://www.iocbc.com/
2021-05-10
SGX Stock
Analyst Report
0.740
SAME
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