Singapore Post Unsp/Adr

Good morning, everyone, and welcome to ThinkPulse, to our first time on the Xbox 360 community. Today, we are pleased to have with us our new CEO, Mark Hall, who became CFO, IBECA, and COO new to me. So this session will be broadcast live and recorded. Without further ado, let me hand over to Coop. Yeah, thanks, Selena. Actually, before we jump in, Coop, could I know who's online? These are audience participants on the webcast. Anyone who registers can join it. Which are the houses that? It's open to everyone. Thank you everyone for coming to our Dutch announcement for H1 of FY26. My name is Ngoc Chiong. I'm 10 days old on the job. I think there may be a fair bit of interest on how we are going to take the company forward, our strategies. I really would like to share those with you when we are ready. But I've been only 10 days on the job. I'm afraid there's not much I can talk about on the future plan. Today we are really talking about the results announcement. section. And you know that St. Paul's has divested some assets overseas. We have folded the international division into the domestic box. We are now a single entity. We have dropped the word group from our titles. We are just as we are. So the immediate order of business for us right now is to um ensure that our business our core business run well our customers are well served so we are looking at for the immediate term operational efficiency widening our network serve our customers and keep the core business running well through our recent divestments of course achieve the proceeds We have paid out the specialty. We have paid down debt, a chunk of debt. And we'll keep the rest for our working capital, et cetera. So we will continue to maintain a disciplined capital management approach. This call is now being transcribed. So those are the immediate priorities. For the results, I will now hand over to Thank you Mark and good morning. As Mark conveyed, our focus is on a stable and sustainable future, underpinned by a strong financial position. And this first half really has to be defined by actions that reflect that commitment. We completed a major organisational alignment with the sale of the Australian business. This was an important step to ensure that our corporate structure is right size, optimised for the remaining size. This included removing overlapping corporate and support functions, integrating the cross-order operations into the portal and logistics business in Singapore, and further streamlining activities. Along with that, we have concluded several transactions. This includes the unwinding of the cross-holdings with Alibaba, leading to the divestment of 4PX, and the cessation of the joint venture Quantip Solutions. These quantum solutions subsidiaries have also since been divested and we have also completed the sale of a trade-only business, Famous Holdings. The combined result of these actions is a stronger balance sheet, providing the financial flexibility and foundation for future growth. Next slide, please. Now, Our operational developments over the first half are centred on two areas that enhance our capacity, efficiency and reach. First, on the capacity front, the $30 million investment to expand parcel-solving capacity at the e-commerce logistics hub in Tampines is on track, expected to be fully operational by mid-2026. E-commerce remains a growth driver for the logistics business. As such, we are tripling our capacity to address demand, efficiency, and service quality, which in turn will enable us to scale up this business segment efficiently. On the network front, we expanded our reach across the island through strategic collaborations and partnerships to offer our customers maximum convenience and choice. This includes partnerships with pick lockers, chairs, and fair price express outlets. We have also been deploying 24x7 cork-drop kiosks that provide a one-stop service to customers. Our post office also serves as a partnership touchpoint with PHL and FedEx. We have also started a trial for the posting and return of mail directly at the leather box nests of several HDB housing blocks. If successful, this may be rolled out island-wide, which would enhance customer convenience. These investments in capacity and level are key, not just to make the business more efficient, but also to solidify our competitive position and serve customers even more effectively. Now onto the financials. As we move from the second half of the last financial year into the review period, cost discipline was key. This has enabled the company to reverse from a $0.5 million loss in the preceding six months to an underlying net profit of $5.5 billion this past year. In operational discipline, costs have come down, reflecting two key drivers. One, organizational streamlining and cost management efforts. and two, a reduction in expenses intended with lower volumes and revenue. The recent divestments have led to exceptional gains on a disposal of about $9 million. There is also a fair value gain on Singapore Centre of $5.5 million in exceptional items. As a result, profit from continuing operations was higher at $20.6 million. In comparison, discontinued operations incurred a $2.2 million loss this half. compared to a $21 million profit in the prior period when the divested Australian business was still included. Put together, net profit was 17% lower year on year. Excluding these exceptional gains, the underlying net profit of UMP was $5.5 million lower year on year, but as mentioned, better than the loss in the second half of last year. The lower UMP year on year is attributable to two main factors. The loss of profit contributions from the Australian business, which previously boasted our results. The softer performance in the cross-border business, which I'll cover next in the segments. Now, with the change in SingPost's profile, we have revised the business segments to logistical methods, post office network and property assets. This change was from Australia, international and Singapore. Logistics and letters which now cover the delivery business both domestically and internationally, as well as other services, is our largest segment by revenues. Post office network comprises agency services, product sales, and rental of space and the post office. Property assets refer to rental and related contributions from property, properties, the largest contributor being Singapore Centre. moving into a segment by segment review. Logistics and letters face a challenging operating environment, which resulted in lower revenues of $133.5 million and an operating loss of $4.4 million. Letter mail volume continued its structural decline, a trend that we have been managing for some time. volume of domestic e-commerce delivery softened about 3% over the period. In contrast, cross-border e-commerce volume fell by 63% year-on-year, a reflection of the difficult market conditions in that space. This was part of a much larger global trend, which has seen significant volatility, particularly with the US tariff situation. taken actions to streamline the cross-border operations and also implement cost measurement measures to align with the reduced business activity. Along with the drop in volume related expenses, the segment operating costs have fallen about 27% year on year. Now moving on to the post office network. In the post office network, the decline in revenues was mainly due to lower agency services revenue. This was partly cushioned by higher rental income from leasing within the post office network properties. Our efforts to control costs and optimize the network yielded results. Costs were reduced by 13%, which lowered the operating loss from $6.7 million to $5.8 million. Property assets. Property assets comprises property rental and related activities, and mainly at St. Paul Center. The segment continues to provide consistent revenue streams. With the focus on maintaining high tenancy levels, we saw improved revenue performance driven by rental growth at Singapore Centre. Overall occupancy rate was 99.2%. Operating profit was lower, primarily due to higher expenses like property management, service costs and property tax. Now on to the balance sheet. There are a couple of points I would like to highlight. One, The balance sheet movements are largely the effect of consolidation of subsidiaries that were divested. With the divestments this year, including the Australian business, our financial position has been strengthened by proceeds from exposure. The company's cash position is $594.1 million. This provides us with financial flexibility, enabling the funding of operation investments as well as future requirements. To complete the financial picture, let me highlight some points on cash flows. Cash flows generated before working capital was lower compared to the prior period. This was expected, primarily due to the absence of contributions from divestment subsidies. The negative operating cash flow after working capital changes was driven mainly by higher settlement of payments. Investing cash flows was largely due to proceeds from disposals, affecting the realization of value for this non-core asset. Financing cash outflows was primarily due to the special dividend payout to shareholders in August with respect to the sale of the Australian business. Lastly, I am glad to share that the Board has declared an interim dividend of $0.08 per share, which represents 30% of the UMP for the first half. That concludes my presentation. I will disappear the approach as positioned as well on the road ahead. With that, I will hand over to Selina to move on to session. Thank you. Yes, why don't we start? First is, how should we think about margins moving forward, and should we expect the logistics and land segment to return to land and home here? Second question is, could we pick more colour about segments or routes that may be doing poorly for cross-border service? And also, what is your outlook for the segment at Google to be able to set the endurance level? So, first off, we don't typically comment on the forward-looking state for this. But I think what we have seen in our presentation is that We have actually executed very well on several cost-centred control initiatives. We will continue to see the efforts of this in our numbers going forward. We believe that there continues to be good opportunities in the methods and logistics space, and we will continue to build on our network as well as our service levels, which will then ensure the right for us to play in this space. Anything you want to add to that? Can I just say, as you know with the Joe Pergolo situation, that store has a lot of cost, a lot of headway between the store's daughter business. That's why we did the consolidation of the national business as part of a single unit. So this is already one of the key efforts we've undertaken, structurally being a lot leaner, in order for us to then take the strategic review with the support of SMART, then see what is the benefit for it.

Sorry, just one question.

So what the structural decline of the postal network and also the volumes, how do you actually stop that? Because this is a structural problem. So is there any plans for any, what are the key plans to stop this structural decline? Because this has been happening for the last 10 years.