SingPost shares sink 11.8% after underlying second-half loss despite planned 9-cent special dividend

SINGAPORE - Singapore Post has proposed a special dividend of nine cents per share after it booked a net exceptional gain of $222.2 million, largely from the recent divestment of its business in Australia.

Including an interim dividend of 0.34 cent, which has been paid, SingPost shareholders are set to receive a total of 9.34 cents, the company said on May 15.

Its net exceptional gain of $222.2 million for the full year ended March 31 came largely from a $302.1 million gain on its disposal of its Australian logistics business, Freight Management Holdings (FMH).

This was partially offset by impairment charges of $79.6 million on another business, Quantium Solutions.

Net profit for the full year stood at $245.1 million, up 212.9 per cent from $78.3 million the previous year. But excluding the net exceptional gain, underlying net profit fell 40.3 per cent to $24.8 million.

For its second half-year, SingPost posted an underlying net loss of $0.5 million, reversing a $28.1 million profit in the same period last year.

SingPost shares closed down 11.8 per cent, or 7.5 cents, to 56 cents on May 15. It was the most heavily traded stock by volume with 69.5 million shares changing hands.

“This downturn reflects the intensifying challenging and uncertain conditions in the global logistics sector,” the company said.

SingPost said the global economic outlook remains clouded by ongoing trade tensions, with US tariffs and retaliatory measures by key trading partners.

“In the logistics sector, the impact has been particularly pronounced. Cross-border logistics volumes have come under pressure. This, along with geopolitical tension, has led to a more uncertain and challenging operating environment,” it said.

SingPost added that these challenging conditions intensified in the second half of the financial year and are expected to persist into the coming financial year.

SingPost completed the sale of FMH for A$1.02 billion (S$853 million) in March.

The company said that after the divestment of the Australia business, the group has taken steps to sharpen its focus on its core business, including streamlining its operations to right-size the cost base.

The international cross-border business has been reintegrated into the Singapore postal and logistics business to achieve business synergies and drive operational efficiencies, it said.

In a media briefing on May 15, SingPost group chief financial officer Isaac Mah said the international space has been very competitive due to global players, and that SingPost does not have their scale.

“Given the challenging environment and the risks around geopolitical tensions, we’ve decided to move away from that space and focus on our core competencies here in Singapore,” he said.

Mr Mah said SingPost will remain in international postal services, but that it has identified its freight forwarding business as not a core asset and will sell it if the right buyer is found.

Moving forward, he expects better results, as the impact of actions taken recently to right-size the cost base of the business will show up in the next financial year.

“Our balance sheet is also a lot stronger,” he said, noting that the firm has repaid around $600 million in debt, which will drive its interest expenses down and put it in a net cash position.

“But I think we just wanted to be very upfront that the operating environment does look challenging, and management is very conscious of it... which is why we have also proposed the restructure,” he said.

Full-year revenue fell 7.5 per cent to $813.7 million, primarily driven by headwinds in its international segment, the company noted.

The Singapore segment registered a modest increase of 2.9 per cent in revenue to $326.7 million. But this was underpinned by the property business, which recorded a strong 11.9 per cent increase in revenue. 

Following the results, OCBC equity research analyst Ada Lim trimmed her fair value estimate for the stock to 60.5 cents from 62 cents. She maintained her “hold” call on SingPost, while awaiting further clarity on its next engine of growth.

SingPost said its strategic review and restructuring are ongoing.

The company is engaging the Government to develop a more sustainable operating model, as the post office network is not profitable, Mr Mah said. SingPost has 42 post offices, of which it owns 21.

It is also investing $30 million in a new automation system to expand processing capacity for small parcels at the regional e-commerce logistics hub facility.

In February, SingPost said it will lay off around 45 workers in the coming months, as part of efforts to trim operations.  

Seven executives were reported to have

left the company

in April. These include head of strategy and communications Lee Eng Keat, group chief people officer Sehr Ahmed, group chief information officer Noel Singgih, chief sustainability officer Michelle Lee and chief information security officer Audrey Teoh.

SingPost said at the end of 2024 that it had received whistle-blowing reports that revealed cases of data falsification at the company’s international business unit.

Three senior executives – group chief executive Vincent Phang, chief financial officer Vincent Yik and international business unit CEO Yu Li – were

sacked for mishandling the reports.

All three have hired lawyers and are contesting the decision.