SingPost posts S$245.1m profit on Australia divestment but core earnings fall

Singapore Post Ltd (SingPost) has announced a net profit of S$245.1 million for the financial year ended 31 March 2025, more than double the S$118.5 million earned in the previous year.

The results, released on 15 May, were buoyed by an exceptional gain of S$222.2 million, primarily from the divestment of its Australian operations. The headline figure masked a steep fall in underlying profitability, with management warning of a tough global outlook for logistics and cross-border trade.

Boost from Australian divestment

The profit surge stemmed mainly from the disposal of SingPost Australia Investments, which generated S$302.1 million. A fair value gain of S$15.2 million on properties also contributed.

These gains were partly offset by impairment charges of S$79.6 million, largely tied to the group’s logistics arm, Quantium Solutions.

The divestment was first flagged in December 2024, when SingPost said it would sell its stake in Freight Management Holdings (FMH) to private equity firm Pacific Equity Partners. At the time, the disposal gain was expected to be around S$312.1 million.

Strengthening the balance sheet and rewarding shareholders

SingPost said proceeds from the sale had been used to reduce debt, improve balance sheet resilience, and fund growth initiatives.

A significant portion has been earmarked for shareholder returns. The board has proposed a special dividend of S$202.5 million, equivalent to 9 cents per ordinary share.

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

The payout is subject to shareholder approval at the 33rd Annual General Meeting, with record and payment dates to be announced.

Underlying business under pressure

Excluding the divestment, SingPost’s underlying net profit fell by more than 40 per cent to S$24.8 million.

The company posted a net loss of S$0.5 million in the second half of FY2024/25, compared with a profit of S$28.1 million in the same period a year earlier.

Management attributed the decline to “intensifying challenging and uncertain conditions in the global logistics sector”.

Group revenue for the year was S$813.7 million, a 7.5 per cent decline from FY2023/24. The international segment saw the steepest drop, falling 11.2 per cent to S$494.3 million.

In contrast, revenue from the Singapore segment rose 2.9 per cent to S$326.7 million. Property revenue within this segment climbed 11.9 per cent to S$86.9 million, providing some offset.

Famous Holdings, SingPost’s freight forwarding arm, showed positive momentum, but overall international operations remained subdued.

Global headwinds weigh on logistics

The company cited ongoing trade tensions, including US tariffs and retaliatory measures by key trading partners, as major drags on international logistics flows.

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

Cross-border parcel volumes have also come under pressure, with geopolitical tensions compounding uncertainties. The group expects these conditions to persist into FY2025/26.

Refocusing on core operations

Following the exit from Australia, SingPost has reintegrated its international cross-border business into the Singapore postal and logistics segment.

The move is intended to streamline operations, create synergies, and drive cost efficiencies.

To support future growth, SingPost has committed S$30 million to an automation upgrade at its Regional eCommerce Logistics Hub. The new system will expand small parcel processing capacity, catering to rising demand in e-commerce.

Management said the company remains in discussions with the Singapore government on developing a sustainable operating model for the national postal service.

Cost discipline and strategic reset

SingPost has reiterated its focus on capital discipline and cost management. It is actively reviewing non-core businesses and assets for potential divestments to unlock shareholder value.

The company is also undergoing a strategic reset of its long-term direction. This follows a series of corporate governance challenges in late 2024, when three senior executives were dismissed after internal investigations prompted by a whistleblower report.

The executives were former group CEO Vincent Phang, CFO Vincent Yik, and Li Yu, chief of the international business unit. All three have stated their intent to contest their terminations.

In February 2025, SingPost retrenched 45 staff from corporate support functions after redeployment options were exhausted. Management described the move as necessary for restructuring and long-term sustainability.

Shareholder outlook

While the one-off gain delivered strong headline profits, analysts say the sharp fall in core earnings highlights the structural challenges facing SingPost.

The logistics industry continues to grapple with weak global trade flows, oversupply of freight capacity, and slowing e-commerce demand growth.

Investors will be watching closely whether the company can execute its operational reset and deliver sustainable earnings growth once the divestment windfall fades.

SingPost’s dividend proposal, if approved, will provide near-term rewards to shareholders, even as longer-term questions remain about the group’s strategic direction.