SingPost to restructure into three autonomous business units

Singapore Post Ltd (SingPost) has concluded its strategic review, initiated in May 2023 with Merrill Lynch (Singapore) Pte. Ltd. (BofA Securities) as the financial advisor. The review aimed to enhance shareholder returns and ensure the Group’s appropriate valuation.

Over recent years, SingPost has evolved from a traditional postal service into a technology-driven international logistics enterprise, focusing on growth and sustainability.

This transformation, supported by a disciplined acquisition approach since 2020, has led to a significant and profitable business in Australia, with overseas revenues now contributing over 85% to the Group’s total revenue and operating profit.

In response to the global decline in letter mail, SingPost adjusted postage rates in October 2023, leading to the postal segment’s return to profitability in Q3FY2023/24.

The future of the postal segment relies on its integration with the growing eCommerce logistics business and a new operating model agreed upon with the regulator.

Simon Israel, Chairman of SingPost, highlighted that the current share price does not reflect the company’s intrinsic value, especially considering the value of the SingPost Centre, the Group’s Australian business, and its growth potential. He emphasized that the management’s strategy execution would unlock shareholder value and ensure agility and sustainable growth.

Vincent Phang, Group CEO, echoed this sentiment, stating that SingPost is poised to capitalize on eCommerce logistics growth trends. The Board has approved five strategic thrusts to be executed over the next three years:

Reorganisation of the Group: SingPost will restructure into three business units—Singapore, Australia, and International—each with the autonomy to develop market leadership and build core capabilities.

Strategic Management of Capital: The Group will actively manage its capital, targeting a return above the cost of capital and monetizing non-core assets to support growth investments and shareholder value.

Transforming Urban Logistics in Singapore: The Singapore unit aims to lead the market in deliveries, leveraging the postal network to innovate and transform the urban logistics landscape.

Achieving Scale in Australia: The Australia unit will use its hybrid 4PL and 3PL capabilities to become a top logistics company, exploring partnerships and M&A opportunities for growth.

Building Tech-Driven Excellence: The International unit will serve cross-border eCommerce customers through the ARRIV 4PL platform, enhancing the supply chain network across key geographies.
From FY2024/25, SingPost will adopt a dividend policy of paying out 30-50% of underlying net profit, balancing capital needs and shareholder returns. These strategic moves position SingPost as a leader in the logistics sector, ready to navigate the challenges and opportunities of the digital economy.