Intense pricing competition resulted in losses. Singapore Post’s (SingPost) logistics segment went into the red as operating profits turned into a loss of $4.2m in Q2.
According to Maybank Kim Eng, even excluding provisions, the operating profit would have been $1m, which is much lower than the operating profit of $5m for 1Q2017.
The segment was in bad debt for a key customer, Quantium Solutions HK.
Intense pricing competition has also resulted in the loss of business.
Further weakening of logistics segment could offset the turnaround of mail and logistics segments.
Whilst the logistics business turned into a weight for the company’s earnings, the drag should still be manageable, the bank said. SingPost’s mail, e-commerce, and associate earnings could still gain momentum, Maybank Kim Eng said.