SGX:S08 (Singapore Post Ltd)
Singapore Post (SingPost) may be keen to unlock value by selling its flagship SingPost Centre, but market sentiment suggests now may not be the right time. The group’s share price tumbled 12% on May 15, despite proposing a S$0.09 per share dividend, funded by gains from the sale of its Australian logistics business.
While that special payout offered temporary cheer, investor reaction was soured by a net loss of S$461,000 in 2HFY2025, a reversal from S$28.1 million in earnings the year prior. Revenue fell 12.1% to S$387.5 million, with both domestic and international postal and logistics operations declining 9.6% and 39.2%, respectively.
SingPost Centre: A Bright Spot Amid Decline
SingPost’s property and freight forwarding sub-segments were rare bright spots, posting operating profit increases of 17.8% and 31%, respectively. Notably, SingPost Centre achieved a 98.2% occupancy rate as of Mar 31, up from 96.2%, with retail fully occupied and office occupancy climbing to 97.6%.
The property segment alone brought in S$48.4 million in operating profit, surpassing the total group operating profit of S$44.3 million after factoring in losses elsewhere.
Strategic Review and Restructuring Underway
SingPost is currently streamlining operations, integrating international and domestic businesses to boost efficiency, while reassessing its post-Australia strategy. However, the postal and logistics core remains challenged, facing structural decline and global competition.
Though the board’s aim to unlock shareholder value is praiseworthy, the sale of SingPost Centre, a top-performing asset, may be premature. Analysts argue that keeping such a strong contributor could provide much-needed earnings stability while the company’s broader reset plays out.
Leadership Shift Signals New Phase
Chairman-designate Teo Swee Lian will lead the board from the next AGM, with recent additions to the board suggesting governance renewal. Shareholders and directors may need to rethink divesting SingPost Centre — at least until the turnaround strategy delivers clearer results.
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