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Investing.com -- S&P Global Ratings has downgraded Singapore Post Ltd. to ’BBB-’ from ’BBB’ with a stable outlook following the company’s significant operational scale-down.
The rating action comes after SingPost completed the sale of Freight Management Holdings Pty Ltd. in March 2025, representing a major strategic shift from its earlier plan to establish Australia as a second home base. The Australian business had accounted for approximately 50% of operating profits for fiscal 2025, which ended March 31.
On Monday, SingPost further reduced its operations by selling its freight-forwarding business conducted through Famous Holdings Pte Ltd. and Rotterdam Harbour Holding B.V., which it had identified as noncore.
These divestments have shifted focus back to SingPost’s postal and logistics business, which faces structural decline and weak profitability. The operating margin for Singapore postal and logistics as well as international businesses was about 1% for fiscal 2025, compared to 15% for the post and parcel segment in fiscal 2020.
The company is currently undergoing management changes and board transformation. Four out of seven directors, including the chairman, joined the company this year. While a chief financial officer and chief operating officer were appointed in January 2025, the CEO position remains vacant.
Despite these challenges, SingPost is expected to maintain a net cash position over the next two years. The recent business sales have boosted its cash position by around S$750 million. The company plans to pay a special dividend of S$202.5 million in fiscal 2026.
SingPost Centre remains a bright spot, contributing S$48.4 million to operating profit for fiscal 2025, compared to the group-level operating profit of S$44.3 million on a continuing operations basis. The property maintained a strong occupancy rate of 98.2% as of March 31, 2025, and is valued at S$1 billion.
S&P indicated it could downgrade SingPost further if business competitiveness weakens or if debt-to-EBITDA exceeds 2.5x. Conversely, an upgrade could follow if the company demonstrates sustained profitability improvement while maintaining earnings diversity and a conservative balance sheet.
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