SingPost picks BofA Securities as financial adviser for strategic review
S INGAPORE Post (SingPost) announced on Monday (Jul 17) that it has appointed BofA Securities as its exclusive financial adviser for its strategic review.
On May 11, SingPost said it was evaluating the commercial sustainability of its domestic postal business as part of a strategic review of its portfolio. This came after the group posted a 28 per cent drop in earnings for the second half ended March 2023.
In its latest statement, the national postal service provider said the review will focus on transitioning the group to a logistics business over time. It will identify potential businesses or assets which are “non-core or which are not expected to earn a return above their cost of capital”.
“This could lead to possible divestments and capital recycling to support further investments in logistics,” the group said.
The review will also look at how the group can optimise its balance sheet and ensure the structure of the group allows its underlying businesses to be “appropriately valued”, while creating “optionality” for the future of these businesses.
“There is no assurance that SingPost will implement any of the options identified through the strategic review,” the group added.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
On Jul 5, the government said it will consider allowing SingPost to introduce postage rate adjustments to “better reflect the cost of letter mail business” following a sharp decline in domestic letter volumes since the Covid-19 pandemic.
SingPost’s shares surged to a seven-week high the next day, and the group later announced it would work with the Infocomm Media Development Authority (IMDA) to review its costs and operating model.
It also said it intends to work with IMDA “towards a framework for long-term sustainability and commercial viability of the domestic postal service”.
SEE ALSO
SingPost chairman Simon Israel expects the decline in the group’s postal business to continue in the 2023/2024 fiscal year, he said in a message to shareholders in the company’s annual report released in June. He noted that the postal segment decline was a “structural issue” requiring a “structural solution”.
The company had highlighted the need for transformation years ago as its postal business faced disruption from digital substitution, further accelerated by the Covid-19 pandemic.
Shares of SingPost closed 2.1 per cent or S$0.01 higher at S$0.49 on Monday.
Copyright SPH Media. All rights reserved.
