SingPost to complete strategic review of business units by next March
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SingPost also said in a statement that the review would focus on transitioning the group into a logistics business in due course.
ST PHOTO: LIM YAOHUI
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SINGAPORE - Singapore Post (SingPost) aims to complete a strategic review of the group’s business lines by March 2024 and has retained BofA Securities as its exclusive financial adviser to oversee the process.
In response to queries from The Straits Times, a SingPost spokesman said on Tuesday that the company intends to complete the strategic review within the current financial year ending March 31, 2024.
SingPost revealed that it is embarking on a strategic review of its operations
At that time, the group’s post and parcel unit had reported its first-ever annual loss in the financial year ending March 31.
There had been a sharp drop in domestic letter volumes since the Covid-19 pandemic, and the downward trend was expected to continue well into the future, SingPost said.
On the flip side, the group’s Australian and international divisions had grown significantly to account for 86 per cent of SingPost’s overall revenue.
This shift in the revenue mix prompted SingPost’s management to review its business segments to see if they still fit into the group’s goal of becoming a global logistics player, and not just a Singapore-only postal services company.
News of the re-evaluation had resulted in some speculation over the future of SingPost’s ailing mail delivery business in the wake of the review.
On July 5, however, the government said it would consider allowing SingPost to raise postage rates
The group said subsequently that it would work with the Infocomm Media Development Authority to review its costs and operating model, as well as work “towards a framework for long-term sustainability and commercial viability of the domestic postal service”.
Since then, SingPost shares have climbed almost 7.7 per cent to close at 49 cents on Tuesday, their highest levels in nearly eight weeks.
Meanwhile, the national postal service provider said in a statement on Monday that the review would focus on transitioning the group into a logistics business in due course.
As part of this process, it would identify potential businesses or assets that are non-core or those that are not expected to earn a return above their cost of capital.
This could lead to possible divestments and capital would be recycled to support further investments in the logistics operations, the group said.
The review would also look at how the group could optimise its balance sheet, enhance shareholder returns, and ensure that the group’s structure would allow its underlying businesses to be “appropriately valued”.
