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Singapore

SingPost reports S$245 million net profit following sale of Australia business

The company saw its underlying net profit dip more than 40 per cent to S$24.8 million for the financial year. 

SingPost reports S$245 million net profit following sale of Australia business

Mail being delivered by SingPost. (File photo: TODAY)

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SINGAPORE: Singapore Post reported a full year net profit of S$245.1 million (US$188 million) for its financial year that ended Mar 31.

This figure, more than double last year's, was due to the company's "exceptional gain" from the divestment of its Australia business, SingPost said in a media release on Thursday (May 15).

The company recorded a net exceptional gain of S$222.2 million for the full year. 

This comprised largely of a gain on disposal of SingPost Australia Investments of S$302.1 million and fair value gain on properties of S$15.2 million, offset partially by impairment charges of S$79.6 million primarily for Quantium Solutions, it said.

It was reported in December 2024 that the company was selling its Australian business, Freight Management Holdings (FMH), to private equity firm Pacific Equity Partners.

The sale was expected to generate a gain on disposal of S$312.1 million, the company said in a Singapore Exchange filing at the time.

On Thursday, the company said the proceeds from the sale of the Australia business have been allocated to debt reduction, shareholder returns, strengthening its balance sheet and funding future growth of the business.

Its board also recommended a S$202.5 million special dividend at 9 cents per ordinary share. 

"The transaction has crystallised the unrealised value of the business, bringing forward the unlocking of value and returning capital to shareholders,” said SingPost board chairman Simon Israel.

The dividends are subject to shareholder approval at its 33rd Annual General Meeting, with the date for payment and the record date of the special dividend to be disclosed at a later time.

UNDERLYING NET PROFIT FELL

Excluding the net exceptional gain, SingPost saw its underlying net profit dip more than 40 per cent to S$24.8 million for the financial year.

The company also had a net loss of S$0.5 million in the second half of the financial year, a contrast to the S$28.1 million profit in the same period last year.

"This downturn reflects the intensifying challenging and uncertain conditions in the global logistics sector," SingPost said.

SingPost's full-year revenue stood at S$813.7 million, a 7.5 per cent year-on-year decrease, primarily driven by "headwinds in its international segment", which also saw revenue decline by 11.2 per cent to S$494.3 million. 

The Singapore segment registered a modest increase of 2.9 per cent in revenue to S$326.7 million, underpinned by the property business, which recorded a strong 11.9 per cent increase in revenue to S$86.9 million, it said.

SingPost added that within the international segment, the freight forwarding business - Famous Holdings group - showed positive momentum, although "the overall segment performance was more muted".

"CHALLENGING OPERATING ENVIRONMENT"

The company said the global economic outlook remains clouded by ongoing trade tensions following the imposition of US tariffs and retaliatory measures by key trading partners.

"These developments have disrupted international trade flows, created greater volatility in supply chains and weakened global economic forecasts," SingPost said.

It noted that the logistics sector has been impacted, with cross-border logistic volumes "under pressure".

"This, along with geopolitical tension, has led to a more uncertain and challenging operating environment."

SingPost expects the "challenging conditions" to persist into this financial year.

Additionally, after the divestment of its Australia business, the group has taken steps to sharpen its focus on its core business, which includes streamlining its operations to right-size the cost base.

Following the review by the board, the company's international cross-border business has been reintegrated into the Singapore postal and logistics business to achieve "business synergies and drive operational efficiencies".

The cross-border business will continue to be part of SingPost’s product offering, leveraging the international postal network, it added.

SingPost also said that efforts are underway to strengthen Singapore's postal and logistics operations for greater efficiency, with a S$30 million investment in a new automation system to expand processing capacity for small parcels at the Regional eCommerce Logistics Hub facility, creating a pathway for future growth.

The company added that it remains engaged with the Singapore government on the future operating model that will place the postal service on a profitable and sustainable footing.

"The group remains committed to disciplined capital management, safeguarding cash flow and exercising cost prudence to preserve financial strength.

"The group also continues to explore opportunities to progressively divest and unlock the value of non-core businesses and assets," SingPost said.

The review and reset of the company's strategy is ongoing.

In February, SingPost said that it would lay off 45 employees – primarily in corporate support units – in a restructuring exercise.

"For affected roles, the company has exhausted options to find alternative positions within SingPost," the company said then.

It added that the layoffs were "not correlated" with any previous incidents or whistleblowing reports.

In December last year, SingPost fired three senior executives after a probe into a whistleblower's report found "grossly negligent" behaviour in their handling of internal investigations. 

The three executives, group CEO Vincent Phang, group CFO Vincent Yik and the chief executive of SingPost's international business unit Li Yu, have said they would contest their sackings.

Source: CNA/fh(rj)
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