TRANSPORT & LOGISTICS | Krisana Gallezo-Estaura, Singapore

What happened after Singpost CEO resigned abruptly in December?

All eyes set on possible strategy shift.

Singapore Post (SingPost)'s has recently reported a healthy 3QFY16 results - a 32.0% YoY rise in revenue to S$316.2m and a 0.6% increase in net profit to S$43.5m in 3QFY16. Further, there were no significant one-off items in the quarter; underlying net profit rose 0.7% to S$43.9m in 3QFY16.

Regardless though, concerns over the abrupt resignation of SingPost's CEO Wolfgang Baier in December still linger. Is it business as usual or are the management changing strategies?

Here's analysts' views on the future of SingPost amidst CEO departure:

Carmen Lee, analyst, OCBC Investment Research

The news of Dr. Baier’s resignation and more importantly, questions on the group’s corporate governance, have badly hit SingPost’s stock price, and understandably so. Taking a dispassionate look at the whole event, however, we note that SingPost’s core businesses should continue to churn out stable cash flows as it remains Singapore’s dominant postal operator. Meanwhile, the market is waiting for results of the Special Audit, which will be undertaken by PwC. In our view, it is also quite likely that a new CEO would only join the firm after there is more clarity from the Special Audit.

Jessalynn Chen, analyst CIMB

Prior to joining SPOST, Wolfgang was with McKinsey and a consultant for SPOST on its transformation plan. He was later appointed CEO. From our understanding, the transformation strategy came from the Board amid declining letter mail volumes.

With the Board still in place and the Chairman overseeing the group’s direction, we think the transformation efforts have not come to a halt (i.e. no change in strategy).
Key management at the individual business unit level is intact. We think business will not be interrupted with Wolfgang’s departure. Marcelo Wesseler, SP eCommerce’s CEO, has been spearheading expansion in the ecommerce business, and been relocated to the US to oversee the consolidation of TradeGlobal and Jagged Peak.

Ms Goh Hui Ling, Deputy CEO of International Mail, has been with the company for over 20 years and remains the key relationship manager with Alibaba. Woo Keng Leong, CEO of Postal Services, is the longest serving top executive at 30 years and continues to drive the mail segment, which contributed 77% of FY15’s operating profit.

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