Singapore Post has sold its third mail printing business in recent weeks, raising more than S$64 million (€42 million) for more investments in its expanding e-commerce logistics activities.
The company announced today that it has entered into a sale and purchase agreement to divest a 90% stake in DataPost Pte Ltd (DataPost) to Jing King Tech Solutions Ptd Ltd for about S$39.3 million. Last month, it divested its 100% stake in Novation Solutions Limited (Novation) and DataPost (HK) Pte Limited (DataPost (HK)) for S$24.4 million.
DataPost, together with Novation and DataPost (HK) in Hong Kong, is engaged in full-service security printing, document management and transactional mail printing services.
SingPost explained that these divestments support its strategy to focus on growing its ecommerce-related businesses in the region. The proceeds will go towards building its capability as a regional leader in ecommerce logistics – as it continues to onboard new ecommerce customers and expand volumes with existing ones – a business which now constitutes about 28% of group revenue.
Dr Wolfgang Baier, Group CEO of SingPost, said: “Over the past financial year, we have invested S$224 million to strengthen our ecommerce logistics capabilities and network in the region through strategic acquisitions, partnerships and joint ventures. Through such strategic investments, we are scaling up to serve the needs of customers as online transactions gain further traction in today’s busy 24/7 lifestyles. This divestment is in line with that strategy which enables us to invest into a sustainable future as letter mail volumes decline.”
Among the recent initiatives SingPost is undertaking in this direction is the construction of the S$182 million Regional eCommerce Logistics Hub in Singapore, beefing up its mail operations’ infrastructure through technology enhancements and new integrated sorting system, and increasing its network of POPStations, which now exceed 100 throughout the island.
Woo Keng Leong, Senior Executive Vice President/Head of Postal Services of SingPost, explained: “As part of good governance, we regularly review our portfolio of businesses and investments to maximise long-term shareholder value. This divestment will enable us to focus on growing our ecommerce logistics business, and entrench our position as a market leader in the region.”
He added that trusted communications and ecommerce logistics remain SingPost’s two strategic focus areas: “We remain committed to our service obligations in Singapore as the national postal service provider, and have been investing significantly into postal infrastructure over the last few years to enhance our service quality and efficiency. Through our remaining stake in DataPost, we will continue to work with our partner to innovate and deliver quality service to our customers.”
SingPost is expected to record an estimated gain of above S$30 million from the divestments of DataPost, Novation and DataPost (HK). The gain on the disposals will be recognised in the SingPost Group’s unaudited results for the first and second quarter of the financial year ending 31 March 2016.
