Latest news with #IsaacMah
New Paper
2 days ago
- Business
- New Paper
SingPost puts 10 HDB shophouses up for sale and leaseback
Singapore Post has put up for sale 10 Housing Board (HDB) shophouses currently occupied by its post office outlets across Singapore, with the aim of leasing them back. A spokesperson said in response to queries from The Straits Times: "SingPost is initiating the divestment of 10 HDB shophouses across Singapore, in keeping with the group's plan to divest non-core assets. "Plans are for a sale and leaseback model to maintain current post office services." In a sale and leaseback model, an asset is sold to someone else, but then leased back to the initial owner for a certain duration. This occurs especially when the asset can be sold at a higher value than its initial purchase price. It can also allow the seller to raise capital from the proceeds of the sale, without interrupting its business operations. SingPost said in May that its strategic review and restructuring are ongoing. Its group chief financial officer Isaac Mah told the media at a briefing then that the company is engaging the Government to develop a more sustainable operating model, as the post office network is not profitable. SingPost has 42 post offices, of which it owns 21. As part of its efforts to restructure, it also sold its Australian logistics business, Freight Management Holdings (FMH). SingPost completed the sale of FMH for A$1.02 billion (S$853 million) in March. The group has also taken steps to sharpen its focus on its core postal and logistics business, including streamlining its operations to right-size the cost base, it said. In 2024, SingPost said that it is considering selling its flagship retail-commercial mixed development SingPost Centre at Paya Lebar Central, which it also identified as a non-core asset. The SingPost Centre was valued at $1.1 billion as at September 2023. Maybank analyst Jarick Seet said SingPost's sale and leaseback bid for the 10 HDB shophouses is "not a new thing". "In their announcements in 2024, SingPost has said that it wants to monetise its assets and reduce postal centres because there has been a drop in usage," he told ST. In 2024, it was reported that SingPost closed 12 post offices, or one out of five branches, in the last two years. This was due to declining mail volumes, as people turn to electronic means instead. It also said that letter mail and printed paper volumes in Singapore fell 8.1 per cent on the year to 87.8 million items, from 95.6 million items. But Mr Seet noted that SingPost may also not be allowed to close so many post offices rapidly as people in the various districts still need to use them, which makes the sale and leaseback model a compromise as it can still free up capital without disrupting services. The gains from the sales could also be used to revitalise SingPost's local business, and ultimately be returned to shareholders, he said. SingPost is already investing $30 million in a new automation system to expand processing capacity for small parcels at the regional e-commerce logistics hub facility. In May, it also announced a special dividend of nine cents per share after it booked a net exceptional gain of $222.2 million, largely from the divestment of its Australian business. Mr Seet reiterated his call to "buy" the stock. "SingPost owns lots of assets that hold intrinsic value like the HDB shophouses, which are now worth much more than what they were bought for. The same goes for SingPost Centre," he said. "If we add the value of all these assets up, it is much more than the market cap of the company today. So SingPost is undervalued, but it depends on the company to unlock value this way." SingPost shares closed at 57 cents on June 19, up nearly 0.9 per cent from its previous close of 56.5 cents.
Straits Times
2 days ago
- Business
- Straits Times
SingPost puts 10 HDB shophouses up for sale and leaseback
Plans are for a sale and leaseback model to maintain current post office services, said SingPost. ST PHOTO: TARYN NG SINGAPORE - Singapore Post has put up for sale 10 Housing Board (HDB) shophouses currently occupied by its post office outlets across Singapore, with the aim of leasing them back. A spokesperson said in response to queries from The Straits Times: 'SingPost is initiating the divestment of 10 HDB shophouses across Singapore, in keeping with the group's plan to divest non-core assets. 'Plans are for a sale and leaseback model to maintain current post office services.' In a sale and leaseback model, an asset is sold to someone else, but then leased back to the initial owner for a certain duration. This occurs especially when the asset can be sold at a higher value than its initial purchase price. It can also allow the seller to raise capital from the proceeds of the sale, without interrupting its business operations. SingPost said in May that its strategic review and restructuring are ongoing. Its group chief financial officer Isaac Mah told the media at a briefing then that the company is engaging the Government to develop a more sustainable operating model, as the post office network is not profitable. SingPost has 42 post offices, of which it owns 21. As part of its efforts to restructure, it also sold its Australian logistics business, Freight Management Holdings (FMH). SingPost completed the sale of FMH for A$1.02 billion (S$853 million) in March. The group has also taken steps to sharpen its focus on its core postal and logistics business, including streamlining its operations to right-size the cost base, it said. In 2024, SingPost said that it is considering selling its flagship retail-commercial mixed development SingPost Centre at Paya Lebar Central, which it also identified as a non-core asset. The SingPost Centre was valued at $1.1 billion as at September 2023. Maybank analyst Jarick Seet said SingPost's sale and leaseback bid for the 10 HDB shophouses is 'not a new thing'. 'In their announcements in 2024, SingPost has said that it wants to monetise its assets and reduce postal centres because there has been a drop in usage,' he told ST. In 2024, it was reported that SingPost closed 12 post offices, or one out of five branches, in the last two years. This was due to declining mail volumes, as people turn to electronic means instead. It also said that letter mail and printed paper volumes in Singapore fell 8.1 per cent on the year to 87.8 million items, from 95.6 million items. But Mr Seet noted that SingPost may also not be allowed to close so many post offices rapidly as people in the various districts still need to use them, which makes the sale and leaseback model a compromise as it can still free up capital without disrupting services. The gains from the sales could also be used to revitalise SingPost's local business, and ultimately be returned to shareholders, he said. SingPost is already investing $30 million in a new automation system to expand processing capacity for small parcels at the regional e-commerce logistics hub facility. In May, it also announced a special dividend of nine cents per share after it booked a net exceptional gain of $222.2 million, largely from the divestment of its Australian business. Mr Seet reiterated his call to 'buy' the stock. 'SingPost owns lots of assets that hold intrinsic value like the HDB shophouses, which are now worth much more than what they were bought for. The same goes for SingPost Centre,' he said. 'If we add the value of all these assets up, it is much more than the market cap of the company today. So SingPost is undervalued, but it depends on the company to unlock value this way.' SingPost shares closed at 57 cents on June 19, up nearly 0.9 per cent from its previous close of 56.5 cents. Sue-Ann Tan is a business correspondent at The Straits Times covering capital markets and sustainable finance. Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
15-05-2025
- Business
- Business Times
‘Nationalisation not on the cards': SingPost CFO
[SINGAPORE] Singapore Post (SingPost) on Thursday (May 15) ruled out the possibility of a nationalisation of the postal service provider, even as it said it is working with the Singapore government to come up with an operating model that is profitable and sustainable. 'Nationalisation is not on the cards,' said SingPost group chief financial officer Isaac Mah at a media briefing following the release of its earnings for the full year ended Mar 31. 'The government acknowledges that right now we do not have a sustainable operating model, especially for the post office network, and we are engaging them on correcting that model so that it's sustainable,' he added. Mah said that this could involve changes in what is required on the ground in terms of the postal network. Another option, he added, could be an increase in postal rates. 'That is definitely one of the potential outcomes in this dialogue with the government,' Mah said. 'But I do not want to run ahead of myself… and at this point, we do not have any concrete details to share.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up He added: 'We are looking at all options.' Meanwhile, amid a cloudy global economic outlook marked by ongoing trade tensions, SingPost on Thursday also announced that it has 'reintegrated' its international cross-border business into the Singapore postal and logistics business. 'Given the challenging environment and the risks around the geopolitical tensions, we've decided to move away from the space and refocus on our core competencies here in Singapore,' Mah explained. The cross-border business will continue to be part of SingPost's product offering, leveraging the international postal network. SingPost said that this is 'to achieve business synergies and drive operational efficiencies'. 'The operating environment does look challenging, and the management is very conscious of it. We are keeping an eye on it, which is why we have proposed the restructure, or the reintegration of International into Singapore, so that we can unlock savings there,' Mah said. 'On top of that, we are continuing to invest in key areas like sortation because that will create advantages for us and optimised margins as well.' To this end, SingPost has invested S$30 million in a new automation system to expand processing capacity for small parcels at the Regional eCommerce Logistics Hub facility. At the same time, following the divestment of its Australian business, Mah noted that SingPost is now in a net cash position. 'We've actually strengthened our balance sheet to a position where we can then refocus and grow in Singapore,' he added. Earnings disappointment amid headwinds Shares of SingPost closed 11.8 per cent or S$0.075 lower at S$0.56 on Thursday, after the group reported an underlying net loss of S$461,000 for the second half-year ended Mar 31, from its net profit of S$28.1 million in the year-ago period. Meanwhile, revenue was down 12.1 per cent at S$387.5 million for the half-year period, from S$440.6 million previously. H2 net profit surged 232.7 per cent to S$222.5 million, from S$66.9 million in the corresponding year-ago period. However, this was mainly due to the recording of an exceptional gain from the divestment of its Australia business. The gain of S$222.2 million comprises largely of a gain on disposal of SingPost Australia Investments of S$302.1 million, as well as fair-value gains on properties of S$15.2 million. This was partially offset by impairment charges of S$79.6 million, primarily for Quantium Solutions. On Apr 16, SingPost and Alibaba agreed to unwind their respective minority cross-shareholdings on Quantium Solutions. The logistics company was majority-owned by SingPost, which paid Alibaba S$36.9 million for its stake. SingPost proposed a special dividend of S$0.09 a share, following the divestment of SingPost Australia Investments. The date payable and record date will be announced later. Earnings per share (EPS) stood at S$0.0989 including distribution to perpetual securities holders, from S$0.0297. Excluding the distribution, EPS stood at S$0.0965, up from S$0.0273. For the full year, net profit jumped 212.9 per cent year on year to S$245.1 million from S$78.3 million. Revenue was down 7.5 per cent at S$813.7 million, from S$879.2 million. Underlying net profit fell 40.3 per cent to S$24.8 million, from S$41.5 million the previous year. By segment SingPost's operating profit in H2 for its Singapore postal and logistics segment fell 55.5 per cent year on year to S$7.4 million, from S$16.6 million. The group noted that the post office network remained unprofitable. But in its property segment, operating profit for the period was up 17.8 per cent at S$24.5 million from S$20.8 million previously. This came largely from higher rental income from SingPost Centre. SingPost's international business posted a wider operating loss of S$5.3 million, from S$559,000 in the previous year, attributable to challenging business conditions in the cross-border business. Its freight-forwarding business posted an operating profit of S$12 million, up 31 per cent from S$9.2 million, as the group benefited from higher sea freight rates.
Business Times
15-05-2025
- Business
- Business Times
‘Nationalisation not on the cards': SingPost reports underlying net loss in H2; to merge Singapore, international segments
[SINGAPORE] Singapore Post (SingPost) on Thursday (May 15) ruled out the possibility of a nationalisation of the postal service provider, even as it said it is working with the Singapore government to come up with an operating model that is profitable and sustainable. 'Nationalisation is not on the cards,' said SingPost group chief financial officer Isaac Mah at a media briefing following the release of its earnings for the full year ended Mar 31. 'The government acknowledges that right now we do not have a sustainable operating model, especially for the post office network, and we are engaging them on correcting that model so that it's sustainable,' he added. Mah said this could involve changes in what is required on the ground in terms of the postal network. Another option, he added, could be an increase in postal rates. 'That is definitely one of the potential outcomes in this dialogue with the government,' Mah said. 'But I do not want to run ahead of myself… and at this point, we do not have any concrete details to share.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'We are looking at all options,' he added. Meanwhile, amid a cloudy global economic outlook marked by ongoing trade tensions, SingPost on Thursday also announced that it has 'reintegrated' its international cross-border business into the Singapore postal and logistics business. 'Given the challenging environment and the risks around the geopolitical tensions, we've decided to move away from the space and refocus on our core competencies here in Singapore,' Mah said. The cross-border business will continue to be part of SingPost's product offering, leveraging the international postal network. SingPost said this is 'to achieve business synergies and drive operational efficiencies'. 'The operating environment does look challenging, and the management is very conscious of it. We are keeping an eye on it, which is why we have proposed the restructure, or the reintegration of International into Singapore, so that we can unlock savings there,' Mah said. 'On top of that, we are continuing to invest in key areas like sortation because that will create advantages for us and optimised margins as well,' he added. To this end, SingPost has invested S$30 million in a new automation system to expand processing capacity for small parcels at the Regional eCommerce Logistics Hub facility. At the same time, following the divestment of its Australian business, Mah noted that SingPost is now in a net cash position. 'We've actually strengthened our balance sheet to a position where we can then refocus and grow in Singapore,' Mah said. Earnings disappointment amid headwinds Shares of SingPost closed 11.8 per cent or S$0.075 lower at S$0.56 on Thursday, after the group reported an underlying net loss of S$461,000 for the second half-year ended Mar 31, from its net profit of S$28.1 million in the year-ago period. Meanwhile, revenue was down 12.1 per cent at S$387.5 million for the half-year period, from S$440.6 million previously. H2 net profit surged 232.7 per cent to S$222.5 million, from S$66.9 million in the corresponding year-ago period. However, this was mainly due to the recording of an exceptional gain from the divestment of its Australia business. The gain of S$222.2 million comprises largely of a gain on disposal of SingPost Australia Investments of S$302.1 million, as well as fair-value gains on properties of S$15.2 million. This was partially offset by impairment charges of S$79.6 million, primarily for Quantium Solutions. On Apr 16, SingPost and Alibaba agreed to unwind their respective minority cross-shareholdings on Quantium Solutions. The logistics company was majority-owned by SingPost, which paid Alibaba S$36.9 million for its stake. SingPost proposed a special dividend of S$0.09 a share, following the divestment of SingPost Australia Investments. The date payable and record date will be announced later. Earnings per share (EPS) stood at S$0.0989 including distribution to perpetual securities holders, from S$0.0297. Excluding the distribution, EPS stood at S$0.0965, up from S$0.0273. For the full year, net profit jumped 212.9 per cent year on year to S$245.1 million from S$78.3 million. Revenue was down 7.5 per cent at S$813.7 million, from S$879.2 million. Underlying net profit fell 40.3 per cent to S$24.8 million, from S$41.5 million the previous year. By segment SingPost's operating profit in H2 for its Singapore postal and logistics segment fell 55.5 per cent year on year to S$7.4 million, from S$16.6 million. The group noted that the post office network remained unprofitable. But in its property segment, operating profit for the period was up 17.8 per cent at S$24.5 million from S$20.8 million previously. This came largely from higher rental income from SingPost Centre. SingPost's international business posted a wider operating loss of S$5.3 million, from S$559,000 in the previous year, attributable to challenging business conditions in the cross-border business. Its freight-forwarding business posted an operating profit of S$12 million, up 31 per cent from S$9.2 million, as the group benefited from higher sea freight rates.
