SingPost Q3 FY25/26 Business Update: Detailed Analysis for Investors

Key Highlights

• Q3 FY25/26 Revenue: S\$92.3 million, a sharp 26.8% decline year-on-year (YoY).
• Operating Profit: S\$3.8 million, down 38.3% YoY but up 22.6% quarter-on-quarter (QoQ).
• Domestic eCommerce Volume: Grew by 11.6% YoY, hitting the highest monthly volume in two years.
• Cross-border eCommerce Volume: Plunged 58.9% YoY, reflecting ongoing market challenges.
• Letter Mail & Printed Papers: Domestic volume dropped 23.4% YoY, a sharper fall than prior periods, signaling persistent structural decline.
• Property Leasing: Revenue improved as SingPost Centre’s overall occupancy rose to 98.9%.
• Post Office Network: Continued operating loss due to lower agency services revenue.
• Major Divestments: Sale of Australia business, freight forwarding, Quantium Solutions entities, and Shenzhen 4PX completed. Awaiting regulatory approvals for divestment of 10 HDB shophouses (sale-and-leaseback arrangement).
• Special Dividend: S\$202.6 million paid, leading to a 14.1% reduction in cash holdings.
• Postage Rate Hike: 10 cents increase effective 1 January 2026.
• Investment in Technology: New small-parcel sorting equipment to be fully operational by mid-2026.

Detailed Financial Performance

Operational Performance

• Domestic Delivery Volume: 78.96 million items (-20.8% YoY), with eCommerce-related deliveries at 8.5 million (+11.6%) and letter mail/printed papers at 70.5 million (-23.4%).
• International Delivery Volume: 1,136,000 kg (-54.8% YoY), with cross-border eCommerce deliveries suffering a 58.9% YoY drop.
• SingPost Centre Occupancy: Overall 98.9% (retail 100%, office 98.5%), up from 98.2% a year ago.

Balance Sheet and Cash Flow

• Cash and Equivalents: S\$598.4 million (down from S\$696.4 million as at March 2025), mainly due to the S\$202.6 million special dividend payout.
• Borrowings: Stable at S\$349.6 million.
• Net Debt Position: Improved to S\$248.7 million (from S\$346.9 million as at March 2025).
• Total Assets: S\$2.05 billion (down 14.2%), reflecting divestments and deconsolidation of subsidiaries.
• Total Liabilities: S\$662.1 million (down 15.4%).
• Total Equity: S\$1.39 billion (down 13.7%).

Strategic & Operational Updates

• Postage Rate Increase: A 10-cent increase effective 1 January 2026 is a direct lever to support revenue, potentially offsetting some decline in letter mail volumes.
• Ongoing Technology Investments: New small-parcel sorting equipment at the Regional eCommerce Logistics Hub will be operational by mid-2026, expected to drive productivity gains.
• Domestic eCommerce Focus: SingPost is aggressively expanding market share, scaling processing capacity, and enhancing digital touchpoints—now exceeding 2,500 across Singapore.
• Cross-border Headwinds: Global trade shifts and regulatory developments are pressuring international eCommerce volumes. SingPost is responding by launching new delivery solutions and deepening international partnerships.
• Property Management: Continued emphasis on yield enhancement and operational efficiency for property assets.
• Divestment Update: The company awaits regulatory approval for the sale-and-leaseback of 10 HDB shophouses, with post office services remaining unchanged at those sites.

Implications for Shareholders

• Revenue Decline: Significant YoY declines in both revenue and operating profit may weigh on share price sentiment, even as cost management preserved profitability.
• Special Dividend: While the payout is positive for income-focused investors, the reduction in cash reserves and overall assets following major divestments could impact future investment capacity.
• Postage Rate Hike: Should help stabilize or improve revenue from mail services, but may not fully offset structural declines in mail volume.
• Growth in Domestic eCommerce: This remains a bright spot and could drive future earnings, especially as productivity investments come online in mid-2026.
• Potential Share Price Sensitivity: The continued structural decline in traditional mail, ongoing international headwinds, and the impact of recent and pending asset sales are important to monitor for future earnings and valuation.

Outlook

SingPost is committed to strengthening its core businesses, improving operational efficiency, and maximizing value from its property assets. The company is proactively adapting to industry headwinds and investing in technology to capture growth in domestic eCommerce. However, macroeconomic and industry-specific challenges, especially in the cross-border segment, remain significant risks.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial adviser before making investment decisions. The information is based on unaudited results and may be subject to change.

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