FINANCIAL STATEMENT AND DIVIDEND ANNOUNCEMENT https://www1.sgxnet.sgx.com/web21/sgxnet/lcanncsubmission.nsf/vwprint/091814b8af53900348... Page 1 of 1 30/07/2007 Print this page SingPost Group's unaudited results for the first quarter ended 30 June 2007 * Financial Statement And Dividend Announcement * Asterisks denote mandatory information Name of Announcer * Company Registration No. Announcement submitted on behalf of Announcement is submitted with respect to * Announcement is submitted by * Designation * SINGAPORE POST LIMITED 199201623M SINGAPORE POST LIMITED SINGAPORE POST LIMITED Leong Chee Sian (Ms) Company Secretary Date & Time of Broadcast 30-Jul-2007 17:08:36 Announcement No. 00068 >> Announcement Details The details of the announcement start here... For the Financial Period Ended * 30-06-2007 Attachments: SGXNETJun2007.pdf Total size = 148K (2048K size limit recommended) Close Window
SINGAPORE POST LIMITED AND ITS SUBSIDIARIES (Registration number: 199201623M) SGXNET ANNOUNCEMENT UNAUDITED RESULTS FOR THE FIRST QUARTER ENDED 30 JUNE 2007 1
PART I INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF YEAR AND FULL YEAR RESULTS (1) (a)(i) Income statement for the group, together with a comparative statement for the corresponding period of the immediately preceding financial year. FY2007/08 FY2006/07 Q1 Q1 Variance S$'000 S$'000 % Revenue 115,531 105,053 10.0% Other gains (net) - Rental and property-related income 5,339 4,794 11.4% - Miscellaneous 2,068 803 157.5% Labour and related costs Volume-related costs 1 Administrative and others Depreciation Selling expenses Finance expenses Total expenses Share of profit of associated companies and joint ventures Profit before income tax Income tax expense Total profit Attributable to: Equity holders of the Company Minority interest Operating Profit 2 Underlying Net Profit 3 (29,551) (28,208) 4.8% (28,988) (24,783) 17.0% (9,083) (8,667) 4.8% (6,456) (6,366) 1.4% (3,105) (2,856) 8.7% (2,303) (2,722) (15.4%) (79,486) (73,602) 8.0% 3,037 1,371 121.5% 46,489 38,419 21.0% (8,016) (7,383) 8.6% 38,473 31,036 24.0% 38,359 30,933 24.0% 114 103 10.7% 38,473 31,036 24.0% 45,472 39,425 15.3% 34,902 30,388 14.9% Earnings per share for profit attributable to the equity holders of the Company during the period: - Basic 1.998 cents 1.617 cents - Diluted 1.996 cents 1.614 cents 2
Notes 1 Volume-related costs comprise mainly traffic and mail outsourcing expenses. 2 Operating profit for the purposes of paragraph 8 Review of the performance of the Group is defined as profit before interest, tax and share of profit of associated companies and joint ventures. 3 Underlying net profit is defined as profit after tax and minority interest, excluding gain or loss on sale of investments, properties, plant and equipment and share of one-off gain from Spring JV on sale of US business and is derived as follows: FY2007/08 FY2006/07 Q1 Q1 Variance S$'000 S$'000 % Profit attributable to equity holders of the Company 38,359 30,933 24.0% Less: Gain on sale of investments, (1,938) (545) 255.6% properties, plant and equipment Less: Share of one-off gain from Spring JV (1,519) - N.M. on sale of US business Underlying Net Profit 34,902 30,388 14.9% N.M. Not meaningful. (1)(a)(ii) FY2007/08 FY2006/07 Q1 Q1 Variance S$'000 S$'000 % Other operating income and interest income 7,407 5,597 32.3% Interest on borrowings 2,348 2,796 (16.0%) Depreciation and amortisation 6,465 6,375 1.4% Impairment of doubtful debts and bad debts written off 102 8 @ Foreign exchange loss 196 52 276.9% Adjustments for overprovision of tax in respect of prior years - 429 (100.0%) Gain on sale of investments, properties, plant and equipment 1,938 545 255.6% @ Denotes variance exceeding 300%. 3
(1)(b)(i) Balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. The Group The Company Jun-07 Mar-07 Jun-07 Mar-07 S$ 000 S$ 000 S$ 000 S$ 000 ASSETS Current assets Cash and cash equivalents 96,346 68,981 90,400 65,600 Trade and other receivables 60,333 63,658 42,850 44,128 Inventories 301 118 239 89 Other current assets 4,698 6,000 3,526 4,775 161,678 138,757 137,015 114,592 Asset held for sale 2,574-2,574-164,252 138,757 139,589 114,592 Non-current assets Trade and other receivables 449 443 8,779 8,774 Investments in associated companies and joint ventures 91,038 87,354 83,372 83,372 Investments in subsidiaries - - 12,105 12,105 Property, plant and equipment 1 269,768 492,237 261,382 488,680 Investment property 1 215,058-219,657 - Intangible asset 315 324 315 324 Other non-current assets 200 200 200 200 576,828 580,558 585,810 593,455 Total assets 741,080 719,315 725,399 708,047 LIABILITIES Current liabilities Trade and other payables 143,486 150,910 144,500 152,500 Current income tax liabilities 49,528 41,135 48,659 40,352 Deferred income 43-43 - 193,057 192,045 193,202 192,852 Non-current liabilities Borrowings 296,820 316,319 296,820 316,319 Derivative financial instruments 2,765 3,168 2,765 3,168 Deferred income tax liabilities 18,073 18,623 17,577 18,127 Deferred income 414-414 - 318,072 338,110 317,576 337,614 Total liabilities 511,129 530,155 510,778 530,466 NET ASSETS 229,951 189,160 214,621 177,581 EQUITY Capital and reserves attributable to the Company s equity holders Share capital 109,462 107,459 109,462 107,459 Other reserves 4,890 4,571 1,612 1,678 Retained earnings 111,774 73,415 103,547 68,444 226,126 185,445 214,621 177,581 Minority interest 3,825 3,715 - - Total equity 229,951 189,160 214,621 177,581 4
Note 1 Included the net book value of the Group s headquarters at Singapore Post Centre (SPC) of S$302.3 million. On adoption of FRS 40 on 1 April 2007, it has been split into 2 parts as follows: The Group The Company Jun-07 Mar-07 Jun-07 Mar-07 S$ 000 S$ 000 S$ 000 S$ 000 Property, plant and equipment 87,227-82,628 - Investment property 215,058-219,657-302,285-302,285 - The Group and the Company reclassified S$215.1 million and S$219.7 million respectively from property, plant and equipment to investment property as at 30 June 2007, representing the portion of SPC that was rented out for the Group and the Company. No adjustments to the comparatives have been made in accordance with the transitional provisions of FRS 40. (1)(b)(ii) In relation to the aggregate amount of the group s borrowings and debt securities. Jun-07 S$ 000 Mar-07 S$ 000 Amount repayable in one year or less or on demand - - Amount repayable after one year: - Bank term loan (unsecured) - 19,920 - Bonds (unsecured) 296,820 296,399 296,820 316,319 (a) The bank term loan of principal amount S$60 million obtained on 6 March 2006 for the Group s general operational purposes was fully repaid as of 30 June 2007. (b) The Singapore Dollar unsecured bonds of principal amount S$300 million listed on the SGX-ST have a maturity period of 10 years from 11 April 2003 and a fixed interest rate of 3.13% per annum. Details of any collateral. Not applicable. 5
(1)(c) Cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year. Cash flows from operating activities Total profit The Group FY2007/08 FY2006/07 Q1 Q1 S$ 000 S$ 000 38,473 31,036 Adjustments for: Tax 8,016 7,383 Amortisation of franchise fees received - (20) Amortisation of licence fee 9 9 Depreciation of property, plant and equipment 6,456 6,366 Gain on disposal of property, plant and equipment (1,938) (545) Interest expense 2,348 2,796 Interest income (284) (345) Share of profit of associated companies and joint ventures (3,037) (1,371) Impairment of receivables 102 8 11,672 14,281 Operating cash flow before working capital changes 50,145 45,317 Changes in operating assets and liabilities Inventories (183) (46) Trade and other receivables 4,485 1,557 Trade and other payables (4,881) (10,359) Cash generated from operations Income tax paid Net cash inflow from operating activities 49,566 36,469 (173) - 49,393 36,469 Cash flows from investing activities Interest received Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Proceeds from winding down of a joint venture Investment in an associated company Net cash inflow from investing activities Cash flows from financing activities Interest paid Proceeds from issue of shares Repayment of bank term loan Proceeds from Universal Postal Union grant Net cash (outflow) from financing activities Net increase in cash and cash equivalents held Cash and cash equivalents at beginning of financial period Cash and cash equivalents at end of financial period 283 337 (2,533) (1,804) 2,777 2,256 172 - (412) - 287 789 (4,578) (4,582) 1,806 1,022 (20,000) (15,000) 457 - (22,315) (18,560) 27,365 18,698 68,981 53,258 96,346 71,956 6
(1)(d)(i) Statement (for the issuer and group) of all changes in equity, together with a comparative statement for the corresponding period of the immediately preceding financial year. The Group Attributable to equity holders of the Company Share Other Retained Minority Total capital reserves earnings Total interest equity S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 S$ 000 Balance at 1 April 2007 107,459 4,571 73,415 185,445 3,715 189,160 Currency translation differences - 572-572 (4) 568 Cash flow hedges - (187) - (187) - (187) Net gain / (loss) recognised directly in equity - 385-385 (4) 381 Net profit - - 38,359 38,359 114 38,473 Total recognised gains - 385 38,359 38,744 110 38,854 Employee share option scheme: - Value of employee services - 131-131 - 131 - Proceeds from shares issued 2,003 (197) - 1,806-1,806 Balance at 30 June 2007 109,462 4,890 111,774 226,126 3,825 229,951 Balance at 1 April 2006 103,057 4,424 39,003 146,484 3,456 149,940 Currency translation differences - (190) - (190) (5) (195) Cash flow hedges - (430) - (430) - (430) Net loss recognised directly in equity - (620) - (620) (5) (625) Net profit - - 30,933 30,933 103 31,036 Total recognised gains / (losses) - (620) 30,933 30,313 98 30,411 Dividend relating to FY2005/06 - - (33,495) (33,495) - (33,495) Dividend relating to minority shareholders relating to FY2005/06 - - - - (240) (240) Employee share option scheme: - Value of employee services - 301-301 - 301 - Proceeds from shares issued 1,121 (99) - 1,022-1,022 Balance at 30 June 2006 104,178 4,006 36,441 144,625 3,314 147,939 7
The Company Share Other Retained Total capital reserves earnings equity S$ 000 S$ 000 S$ 000 S$ 000 Balance at 1 April 2007 107,459 1,678 68,444 177,581 Net profit - - 35,103 35,103 Total recognised gains - - 35,103 35,103 Employee share option scheme: - Value of employee services - 131-131 - Proceeds from shares issued 2,003 (197) - 1,806 Balance at 30 June 2007 109,462 1,612 103,547 214,621 Balance at 1 April 2006 103,057 1,209 34,789 139,055 Net profit - - 30,002 30,002 Total recognised gains - - 30,002 30,002 Dividend relating to FY2005/06 - - (33,495) (33,495) Employee share option scheme: - Value of employee services - 301-301 - Proceeds from shares issued 1,121 (99) - 1,022 Balance at 30 June 2006 104,178 1,411 31,296 136,885 (1)(d)(ii) Details of any changes in the company s share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. During the three months ended 30 June 2007, the Company issued 2,691,934 ordinary shares at prices ranging from S$0.547 to S$1.048 upon the exercise of options granted under the Singapore Post Share Option Scheme. As at 30 June 2007, there were unexercised options of 16,480,061 (30 June 2006: 19,443,711) of unissued ordinary shares under the Singapore Post Share Option Scheme. (2) Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice. The figures have not been audited or reviewed. 8
(3) Where figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of matter). Not applicable. (4) Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied. Except as disclosed under paragraph 5 below, the Group has applied the same accounting policies and methods of computation in the financial statements for the current reporting period compared with the audited financial statements for the financial year ended 31 March 2007. (5) If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change. On 1 April 2007, the Group and the Company adopted the new or revised FRS that are applicable in the current financial year. The financial statements for the financial period ended 30 June 2006 have been amended as required, in accordance with the relevant transitional provisions in the respective FRS. The following are the new or revised FRS relevant to the Group: FRS 1 FRS 40 FRS 107 Presentation of Financial Statements (Capital Disclosures) Investment Property Financial Instruments: Disclosures The adoptions of the above new or revised FRS did not result in any financial impact on the Group and the Company except as discussed below: (i) FRS 1 Presentation of Financial Statements (Capital Disclosures) The amendment to FRS 1 introduces disclosures about the level of an entity s capital and how it manages capital. The required disclosures will be made accordingly in the financial statements of the Group and the Company for the financial year ending 31 March 2008. (ii) FRS 40 Investment Property FRS 40 requires companies to choose to measure investment properties using their fair value or at cost. The Group and the Company have elected to measure investment properties at cost. Thus, investment properties are stated at cost less accumulated depreciation and any impairment losses. Under FRS 40, when a portion of a property is leased out and another portion is held for own-use, the portions are required to be accounted for separately if these portions could be sold or leased out separately under a finance lease. Consequently, on adoption of FRS 40 on 1 April 2007, the net book value of SPC has been split into 2 parts as follows: 9
The Group The Company Jun-07 Mar-07 Jun-07 Mar-07 S$ 000 S$ 000 S$ 000 S$ 000 Property, plant and equipment 87,227-82,628 - Investment property 215,058-219,657-302,285-302,285 - The Group and the Company reclassified S$215.1 million and S$219.7 million respectively from property, plant and equipment to investment property as at 30 June 2007, representing the portion of SPC that was rented out for the Group and the Company. No adjustments to the comparatives have been made in accordance with the transitional provisions of FRS 40. There is no impact on the income statement. (iii) FRS 107 Financial Instruments: Disclosures FRS 107 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including minimum disclosures about credit risk, liquidity risk and market risk (including sensitivity analysis to market risk). The required disclosures will be made accordingly in the financial statements of the Group and the Company for the financial year ending 31 March 2008. (6) Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. The Group FY2007/08 FY2006/07 Q1 Q1 Based on weighted average number of ordinary shares in issue 1.998 cents 1.617 cents On fully diluted basis 1.996 cents 1.614 cents (7) Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the current financial period reported on and immediately preceding financial year. Net asset value per ordinary share based on issued share capital of the Company at the end of the financial period (cents) The Group The Company Jun-07 Mar-07 Jun-07 Mar-07 12.0 9.9 11.2 9.3 10
(8) Review of the performance of the group. (8)(i) Financial Highlights First Quarter ended 30 June 2007 The Group posted a 10.0% growth in revenue from S$105.1 million to S$115.5 million, with all three business segments achieving improved performances. Mail Revenue increased 10.9% from S$82.4 million to S$91.4 million, on the back of higher contributions from domestic mail, international mail and hybrid mail. The first quarter included one-off mailings such as the GST Offset Package. Logistics Revenue was up 3.8% from S$15.5 million to S$16.1 million on increased Speedpost traffic and vpost on-line shopping transactions. Retail Revenue rose 10.6% from S$12.7 million to S$14.1 million, underpinned by growth in financial services. Rental and property-related income showed an 11.4% increase from S$4.8 million to S$5.3 million. The Group continued to benefit from higher rental rates and yield enhancement initiatives at SingPost Centre. Miscellaneous income rose by 157.5% from S$0.8 million to S$2.1 million. During the first quarter, the Group recorded a gain of S$1.9 million from the disposal of a non-core property. Total expenses increased by 8.0% from S$73.6 million to S$79.5 million, as a result of higher labour and related costs, volume-related costs as well as selling expenses, which rose in tandem with increased business activities. Finance expenses declined by 15.4% from S$2.7 million to S$2.3 million as the Group fully repaid the bank term loan obtained in March 2006. The Group achieved a 15.3% growth in operating profit from S$39.4 million to S$45.5 million, with all business segments contributing to the improvement. Mail operating profit rose by 14.3% from S$32.5 million to S$37.2 million, on good operating leverage, while Logistics operating profit improved by 7.6% from S$1.9 million to S$2.1 million. In Retail, operating profit rose by 11.9% from S$1.8 million to S$2.0 million. The Group s share of profit from the Spring JV included a one-off gain of S$1.5 million from the sale of its US business. Excluding the one-off gain, contributions from the Spring JV rose by 10.7% or S$0.1 million from S$1.4 million to S$1.5 million. As a result of the good operational performance, the Group achieved a 24.0% increase in net profit from S$30.9 million to S$38.4 million. Excluding gains from the disposal of non-core properties and the one-off gain on the sale of the US business by the Spring JV, the Group s underlying net profit showed a 14.9% growth from S$30.4 million to S$34.9 million. Balance Sheet Total assets amounted to S$741.1 million as at 30 June 2007, compared to S$719.3 million as at 31 March 2007. Cash and cash equivalents rose from S$69.0 million to S$96.3 million. Total liabilities amounted to S$511.1 million as at 30 June 2007, compared to S$530.2 million as at 31 March 2007. Borrowings declined from S$316.3 million to S$296.8 million, as the remaining S$20 million bank term loan was repaid during the first quarter. 11
Cash Flow The Group s cash flow was robust. Net cash inflow from operating activities amounted to S$49.4 million, compared to S$36.5 million in the same quarter last year. (8)(ii) Detailed Financial Analysis Revenue Revenue by segments: Revenue FY2007/08 FY2006/07 Q1 Q1 Variance S$ 000 S$ 000 % Mail 91,403 82,386 10.9% Logistics 16,092 15,500 3.8% Retail 14,072 12,719 10.6% Inter-segment eliminations (6,036) (5,552) 8.7% Total 115,531 105,053 10.0% Operating Profit Operating profit by segments: Operating Profit FY2007/08 FY2006/07 Q1 Q1 Variance S$ 000 S$ 000 % Mail 37,212 32,545 14.3% Logistics 2,091 1,943 7.6% Retail 2,003 1,790 11.9% Others 4,166 3,147 32.4% Total 45,472 39,425 15.3% (9) Where a forecast or a prospect statement has been previously disclosed to shareholders, any variance between it and the actual results. Not applicable. 12
(10) A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. SingPost believes it is well positioned to address the challenges of the deregulation of the basic mail services market. The Group is actively pursuing and implementing initiatives to enhance and grow its core business of Mail and Logistics. As part of its diversification strategy, the Group will continue to leverage its retail and distribution network to offer higher value products and services to customers. It is also continuing to extend its regional reach with initiatives to roll out and grow the hybrid mail and vpost businesses in the regional markets. (11) Dividends Current financial period reported on Interim dividend In relation to the first quarter ended 30 June 2007, the Board of Directors has declared an interim dividend of 1.25 cents per ordinary share (tax exempt one-tier). The interim quarterly dividend of 1.25 cents per ordinary share will be paid on 31 August 2007. The transfer book and register of members of the Company will be closed on 17 August 2007 for the preparation of dividend warrants. Duly completed registrable transfers of the ordinary shares in the capital of the Company received by the Company s registrar up to 5.00 pm on 16 August 2007 will be registered to determine members entitlements to the dividend. Corresponding period of the immediately preceding financial year Interim dividend An interim dividend of 1.25 cents per ordinary share (tax exempt one-tier) in relation to the first quarter ended 30 June 2006 was declared on 24 July 2006 and paid on 31 August 2006. (12) If no dividend has been declared (recommended), a statement to that effect. Not applicable. 13
PART II OTHER INFORMATION (13) Interested Person Transactions During the first quarter ended 30 June 2007, the following interested person transactions were entered into by the Group: Aggregate value of all interested person transactions during the financial period (excluding transactions less than S$100,000 and transactions conducted under shareholders mandate pursuant to Rule 920) Aggregate value of all interested person transactions conducted under shareholders mandate pursuant to Rule 920 (excluding transactions less than S$100,000) Sales FY2007/08 FY2006/07 FY2007/08 FY2006/07 Q1 Q1 Q1 Q1 S$ 000 S$ 000 S$ 000 S$ 000 MediaCorp Pte Ltd and its associates - - 215 - Singapore Airlines Limited and its associates Singapore Telecommunications Limited and its associates - - 2,444 1,237 - - - 14,604 * - - 2,659 15,841 Purchases Aetos Security Management Private Limited and its associates - - - 191 Power Seraya Limited and its associates - - - 3,890 Singapore Telecommunications Limited and its associates Temasek Holdings (Private) Ltd and its associates - - 182 183 * - - 314 * - - - 496 4,264 Total interested person transactions - - 3,155 20,105 Note All the transactions set out in the above table were based on the Group s interested person transactions register. They were either based on contractual values for the duration of the contracts (which may vary from 2 months to 3 years) or based on actual transacted values during the period for open-ended contracts. * Include contracts of duration exceeding one year. 14
(14) Confirmation by the Board pursuant to rule 905(4) of the listing manual On behalf of the Board of Directors of the Company, we, the undersigned, hereby confirm to the best of our knowledge that nothing has come to the attention of the Board of Directors of the Company which may render the financial statements for the first quarter ended 30 June 2007 to be false or misleading. On behalf of the Board of Directors MR LIM HO KEE Chairman MR LAU BOON TUAN Director Singapore 30 July 2007 15