SingPost's only bright spot, if any, was its property segment where better occupancy rate at SingPost Centre helped hold operating profit for the year at $45.2 million, up 0.5% y-o-y.
Together with significantly lower exceptional items, FY2026 earnings was 75.2% lower at $60.9 million, while underlying net profit was down 57% to $10.7 million.
SingPost plans to pay a final dividend of 0.06 cents and a so-called supplemental dividend of 0.41 cents, following 0.08 cents already paid for the interim.
Going forward, Lim sees the company trying to lower costs by at least 10% by optimising its operations and network.
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SingPost is also seen to leverage on its competitive advantage of access to the letterbox network to diversify beyond e-commerce through expanding across markets, services, and customers, such as healthcare-related applications.
To this end, SingPost on May 14 announced an MOU with clinic chain Fullerton Healthcare Group to explore the co-development of a robust, integrated healthcare delivery system.
With SingPost Centre no longer slated for divestment and instead deemed a "crucial" part of the company's portfolio, Lim believes that the focus will be on potential yield enhancement moves, including redevelopment to take advantage of lifted height restrictions with the move of the nearby Paya Lebar air base.
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"We see this as a doubling down on its core business rather than a major shift in tone versus what management has been working on since the divestment of its Australia business," says Lim.
Following the results announcement, Lim observes that SingPost's share price has reacted negatively as investors were likely let down by the "lack of a bazooka development".
"A turnaround towards commercial sustainability will take time and upfront investments, supported by financial discipline, and management’s ability to execute will be key. All things considered, we roll forward our forecasts.
"With management categorically stating that SingPost is not looking to inject its properties into a REIT nor transform into a property player, we think its days of streamlining its asset base is over," says Lim.
SingPost shares as at 4.35 pm held steady at 34 cents.
