Highlights

Singapore Post: Impairments Made; US Operating Losses to Continue Till Exit

Date: 07/05/2019

Source  :  OCBC
Stock  :  SingPost       Price Target  :  1.00      |      Price Call  :  HOLD
        Last Price  :  0.91      |      Upside/Downside  :  +0.09 (9.89%)
 


Singapore Post (SingPost) saw a 2.1% YoY fall in revenue and a S$75.1m net loss in 4QFY19, bringing full year net profit to S$19.0m. Excluding exceptional items such as a S$100.4m impairment of goodwill, intangible assets and PPE, underlying net profit in 4QFY19 was S$14.5m, or 6.1% YoY lower. This would bring full year underlying net profit to S$100.1m, which was 5.8% lower compared to FY18.

As mentioned in our 1 Feb 2019 report, there are risks of impairments to the US businesses. Do note that besides the impairments that have been made, the group expects to continue to account for operating losses of the US businesses until it completes an exit.

A final dividend of S$0.02/share has been declared, same as last year.

Pending an analyst briefing, we maintain our HOLD rating but put our fair value estimate of S$1.00 under review.

Source: OCBC Research - 7 May 2019

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