New SingPost CEO says executive team will focus on domestic operations in ‘new chapter’ for company

SINGAPORE: Singapore Post will focus on domestic operations and its core businesses including e-commerce as it awaits the completion of a strategic review for the company, newly appointed chief executive officer Mark Chong said on Monday (Nov 10).

“There might be interest or questions about my plans or strategy going forward. I’m afraid I’m very new on the job, we’re still undergoing the review,” he said during a media briefing on SingPost’s results for the first half of its financial year. 

He noted that the company has made announcements about recent divestments and structural changes including folding the international and domestic operations into one unit.

“The team has a fair amount of work cut out right now to ensure stability in the business … for the immediate term, focusing on core business, enhancing our operational efficiency,” he said.

SingPost’s leadership team has gone through some changes in the past year, with three senior executives fired after they were found to be “grossly negligent”, and five leaving the company amid a restructuring exercise.

The February restructuring resulted in 45 employees being laid off, mostly from corporate support units.

SingPost also appointed a new chairman of the board of directors in May.

Mr Chong joined the company on Nov 1. He spent 28 years at Singtel, and served as the telco's group chief corporate officer right before leaving for SingPost.

He previously represented Singtel on the boards of other companies, and is still a board member at the Civil Aviation Authority of Singapore.

Asked about how changes to the leadership have affected business or confidence, Mr Chong said the company is opening a “new chapter in SingPost history”.

“What you see is a new management team in front of you,” he said. The divestment of overseas units had helped SingPost’s financial position so it can explore options.

“We will focus on domestic operations for now, looking at service quality, getting competitive in a challenging industry,” he said.

On Monday, SingPost announced that its net profit for the first half of its financial year fell 17.1 per cent from a year ago, while revenue fell 27.4 per cent.

OPPORTUNITIES IN E-COMMERCE

Looking ahead, e-commerce remains a growth driver for SingPost’s logistics business.

Chief operating officer Neo Su Yin noted that the company invested S$30 million (US$23 million) to expand its capacity to sort small parcels.

“We wouldn't put in this amount of investment that we didn't see that there's continued opportunities to grow in this particular area,” she said.

The facility will give SingPost an edge, she added.

“Given that Singapore is a very challenged market when it comes to manpower, the automation is going to be a huge cost-effective driver for us, as well as to improve our productivity,” said Ms Neo.

While there are challenges in cross-border e-commerce – which saw a 63 per cent decline in delivery volumes year-on-year – the numbers are continuing to grow domestically.

SingPost said it intends to focus on customer experience and service quality for its e-commerce business.

Post offices will also be part of the network to provide good service to customers, said Ms Neo.

"The core focus here is we want to continue to provide the highest level of service to our customers and the post offices continue to be an important touch point as part of our overall network to provide services for our customers." 

She added SingPost will look at post offices as part of its overall strategic review, and noted that beyond post offices, the company has lockers and a partnership with convenience store Cheers, to grow its network and provide convenience for customers.

In its first-quarter update, SingPost said it initiated a one-off divestment of 10 Housing and Development Board (HDB) shophouses on a sale and leaseback basis. 

"When we put up the 10 HDBs for divestment, it was with the intent that we will continue to run the 10 post offices," she said.

The units have reportedly been sold to the chairman of Union Gas.

SingPost also sold its Australian business, Freight Management Holdings, for US$504 million.

“We still own a number of operations in the region, and we are in process of selling those now as well,” said chief financial officer Isaac Mah, adding that the company has divested from three businesses and is in the process of winding up its joint venture with Alibaba.

“Once that is completed, we then will be focusing on organising our portfolio assets, positioning ourselves for future growth,” he said.