Singapore Post (SingPost) shares plunged 8.66% in Thursday's pre-market trading, despite the company's announcement of a special dividend. The sharp decline comes as investors digest the company's full-year financial results, which reveal underlying weaknesses in its core business.
SingPost reported a significant surge in its net profit for the second half ended March 31, which jumped 232.7% to S$222.5 million from S$66.9 million in the previous year. However, this impressive figure was largely attributed to an exceptional gain from the disposal of its Australia business. The company proposed a special dividend of S$0.09 per share following this sale.
However, looking beyond the one-time gain, SingPost's underlying performance paints a concerning picture. Excluding the net exceptional gain, the group actually posted an underlying net loss of S$461,000 for H2, compared to a net profit of S$28.1 million in the year-ago period. This stark reversal in profitability likely spooked investors, leading to the sharp sell-off.
Furthermore, SingPost's revenue for H2 declined by 12.1% to S$387.5 million from S$440.6 million in the previous year. The full-year results show a net profit of S$245.1 million, but this figure is also boosted by the exceptional gain. These numbers suggest that SingPost is facing significant challenges in its core operations, which may have overshadowed the positive news of the special dividend in investors' minds.
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