The Singapore economy may be in dire straits, but at least one company has managed to record higher revenues since the outbreak of Covid-19.

On Aug. 31, SingPost released a business update on SGX, which stated that it made a group profit of S$360 million in Q1 of FY2020, which ended on June 30, 2020.

This represented an increase of 12 per cent of year-on-year growth, as compared to Q1 in FY2019, where SingPost recorded a profit of S$321 million.

Increase in cross-border e-commerce deliveries

The increase in profit was attributed to continued growth in cross-border e-commerce delivery volumes in international post and parcel, as well as the Couriers Please and Quantium Solutions subsidies.

The update stated, "The Group is experiencing strong eCommerce volume growth in Singapore, Australia and for international cross-border deliveries", and noted that the e-commerce market in Australia has expanded strongly, partly due to the impact of Covid-19.

This was enough to make up for a fall in business mailing, less footfall in the property sector, and fewer letters and printed papers being delivered due to electronic substitution.

Higher expenses led to a smaller profit

However, also because of Covid-19, SingPost recorded higher expenses.

Group expenses for Q1 FY2020 was recorded at S$341 million, as compared to S$280 million in Q1 FY2019.

This means that SingPost actually recorded a lower group profit in Q1 FY2020, at S$22 million, as compared to S$42 million in QI FY2019, a decrease of 49 per cent.

The higher expenses came about because of health and safety arrangements for Covid-19, such as temporary housing for Malaysian employees.

"In addition, Covid-19 has caused a massive disruption to international air freight out of Changi Airport, and this resulted in delays and increased conveyance costs. As a result of this disruption, we may temporarily experience volumes being diverted away from Singapore by some of our key customers. Terminal dues for international postal items also increased since January."

SingPost mentioned that the increased costs were also partially offset by the Jobs Support Scheme, implemented by the government during Budget 2020.

Due to the uncertain situation, SingPost said it would "carefully manage" cashflow, expenses and liquidity, and continue its transformation efforts to incorporate smart solutions in its services.

Top image from SingPost Facebook page.