Singapore Post completes strategic review; group to be reorganised into three business units

[The_King]

SINGAPORE: Singapore Post on Tuesday (Mar 19) announced the completion of its strategic review, adding that the group will be reorganised into three business units.

The three business units of Singapore, Australia and International will be "focused on their own individual markets", SingPost said.

 

 

Since 2020, the group has undertaken a "disciplined and systematic acquisition approach" to build its business in Australia. Revenues generated overseas now contribute more than 85 per cent of both total group revenue and operating profit.

The company said: "In the last year, the group has also taken steps to address the structural decline of letter mail which has impacted the commercial viability of postal firms globally."

It increased postal rates in October last year, which contributed to the postal segment returning to profitability in the third quarter of the financial year.

Postage rates for standard regular mail rose from 31 cents to 51 cents – an almost 65 per cent increase – in October last year.

 

Chairman of SingPost Simon Israel said on Tuesday that the board is of the view that the share price of the group “does not appropriately reflect the intrinsic value of the company”.

 

 

“This is particularly apparent considering the value of the SingPost Centre, the group’s Australian business and the group’s growth potential,” Mr Israel said.

SingPost's share price has been trending downwards, closing at 38 cents on Monday. As of noon on Tuesday, the share price rose 6.6 per cent to 40 cents.

Group CEO of SingPost Vincent Phang said: "We have progressively transformed from a traditional postal organisation to a logistics enterprise and are well positioned to leverage e-commerce logistics growth trends to scale our businesses.

"We are focused on executing our strategic thrusts to create market leadership, orientate to growth and generate shareholder value."

THREE BUSINESS UNITS

Singpost said the three business units will "each have the agility and empowerment to operate in their own markets, to develop market leadership and build their core capabilities according to their individual strategies".

 

 

The Singapore business unit will integrate the domestic postal and e-commerce logistics businesses into a single operation.

In Australia, its businesses of Freight Management Holdings, CouriersPlease and Border Express will be integrated into a single unit to offer "a full suite of logistics services".

The international business unit will manage cross-border e-commerce deliveries.

SingPost said it has identified a list of assets and businesses that are "non-core to its strategy" that can be "monetised". This includes selected properties as well as various assets in its international portfolio.

"In view of the transformation of the group to a technology driven international logistics enterprise focused on growth, the dividend policy was also reviewed as part of the strategic review," said Singpost.

 

 

From the next financial year, the board will adopt a dividend policy of paying out between 30 per cent and 50 per cent of underlying net profit.

Source: CNA/cm(mi)

[XianGe]

Dun sound like profitable