SingPost shares hit by risk of impairment for US e-commerce acquisition

SingPost fell as much as 7.1 per cent to S$1.365 on Monday morning (Feb 13), its lowest since Aug 31.
SingPost fell as much as 7.1 per cent to S$1.365 on Monday morning (Feb 13), its lowest since Aug 31. ST PHOTO: DESMOND WEE

SINGAPORE - Shares of Singapore Post fell to more than five-month low after it warned that a US e-commerce firm it acquired in 2015, TradeGlobal, has been performing poorly and its value on the company's books could be significantly impaired.

SingPost fell as much as 7.1 per cent to S$1.365 on Monday morning (Feb 13), its lowest since Aug 31. Over 35.1 million shares were traded, compared to the counter's 30-day average volume of 6.5 million. The stock recovered some ground to trade at S$1.405, down 4.5 per cent, as at 12:34pm.

SingPost shareholders have questioned if the company overpaid to acquire TradeGlobal and other subsidiaries.

TradeGlobal accounted for S$169 million in goodwill and S$43 million in customer relationships - an intangible asset - in SingPost's 2016 financial statements.

But TradeGlobal incurred a significant loss instead of a projected profit in the third quarter peak season, and is expected to make a loss for the full year, SingPost said on Friday (Feb 10).

SingPost said any impairments will be reflected in its results for the full year ending March 31.

Also on Friday, SingPost reported that its net profit for the third quarter fell 27.9 per cent to $31.4 million from a year earlier on the back of operating losses in its US e-commerce business, costs related to the new Regional eCommerce Logistics Hub and a fall in domestic mail volumes.