SingPost chairperson says talks with government ongoing in response to query about state aid
Teo Swee Lian says she cannot disclose the discussions ‘until and unless the government has decided that it wants to reveal it’
[SINGAPORE] Singapore Post (SingPost) chairperson Teo Swee Lian said that the national postal service provider has been “talking to the government”, when asked about state aid for its loss-making postal business.
She was responding to a shareholder’s question at the group’s 34th annual general meeting (AGM) on Thursday (Jul 23) at Suntec Singapore.
Teo said that she was not at liberty to disclose the confidential discussions “until and unless the government has decided that it wants to reveal it”.
The shareholder had called for the postal and logistics player to negotiate with the government on an operating model in which it was paid for providing a national service, rather than relying on dwindling postage sales for revenue.
“I can’t see how your mail services are going to turn around to (make) a profit, and why are we shareholders subsidising all these losses? Without these losses, I think we’ll be getting more dividends, right? So I think it’s important that this issue has to be raised to the government,” said the shareholder. He compared SingPost to transport operator SMRT, which is now paid by the government for running the train and bus services, instead of depending on fare income.
Other shareholders expressed similar concerns about shouldering the financial burden of mail delivery. One called for SingPost to divest its loss-making mail and logistics businesses and focus on its profitable property business.
For FY2026 to March, SingPost’s revenue declined 23.1 per cent on the year to S$376.1 million, from S$489.1 million. The lower top line was attributed to a 55.2 per cent contraction in international revenue amid a volatile global macroeconomic environment, alongside the continued decline in letter mail volumes.
Net profit for the period was 75.2 per cent lower on the year at S$60.9 million, from S$245.1 million. However, underlying net profit, which excludes aged trade payables and exceptional items, stood at S$10.7 million.
Among SingPost’s business segments, which comprise logistics and letters, post office network, and property, only the real estate business was in the black, with an operating profit of S$45.2 million.
Focusing on commercial sustainability
Amid these concerns, CEO Mark Chong pointed out that SingPost’s public postal licence is valid until Mar 31, 2037, and that the group is working on achieving commercial sustainability.
“The green shoots are there. We see our earlier efforts actually are heading in the right direction,” said Chong, who took the reins in November last year.
On the board’s decision not to divest flagship property SingPost Centre, where the group is headquartered, Teo said that SingPost expects upside potential from the Paya Lebar retail-commercial mixed development, especially since the relocation of Paya Lebar Air Base meant that height restrictions in the area would likely be relaxed.
“If – and it’s a very hypothetical – if we had sold last year, we would have left money on the table to the buyer, and you shareholders would have lost that,” she said.
Chong noted that some shareholders were concerned about the potential capital expenditure for asset enhancement of the building. However, he said that SingPost will “exercise financial discipline” and ensure that any investments into the property will be accretive to shareholder value.
One shareholder suggested that the board provide targets or forecasts for financial metrics, similar to ground handler and inflight caterer Sats and the local banks. However, Teo said SingPost was unable to do so at this moment.
“But we will hoist it on board, and we will give (it more thought) when we are able to,” she said.
Another shareholder pointed out the group’s cash holdings of S$603.8 million, asking whether SingPost had plans to deploy them.
“It’s not just there to look pretty,” said Teo.
The group has a S$100 million medium-term note maturing in March 2027 and another S$250 million of perpetual securities with the first step-up in interest rate in July 2027, and Chong noted that the cash balances could potentially be used to repay them.
The AGM lasted around two and a half hours, with 12 resolutions approved.
One was for a supplemental dividend of S$0.0041 per share to be paid out of the expired liabilities tied to SingPost’s international postal arrangements
The counter closed 1.4 per cent or S$0.005 lower at S$0.35 on Thursday.
