SINGAPORE – Singapore Post (SingPost) has initiated significant changes to its leadership by terminating three senior executives, including Group CEO Vincent Phang and Chief Financial Officer Vincent Yik, following findings from internal investigations related to whistle-blower reports. The dismissals were made effective on December 21, 2024, as the board determined the executives displayed 'grossly negligent' behavior.
The internal investigations were prompted by allegations received earlier this year, which claimed certain employees had manipulated delivery statuses for parcels linked to one of SingPost's largest e-commerce customers. Investigators established no delivery attempts had been made, raising serious questions about the integrity of internal processes.
Phang and Yik, alongside Li Yu, the CEO of SingPost's international business unit, are contesting their terminations. They assert the board's decision lacked substantial grounds and the dismissal process was unfair. According to reports, the SingPost board suggested it had lost confidence in the judgment and abilities of the trio to uphold the company's interests.
Experts postulate these leadership changes come at a pivotal moment. Some analysts, including Jarick Seet from Maybank Securities, maintain optimism about SingPost's outlook, emphasizing the company's strategic direction remains intact and focused on asset monetization. This includes the anticipated sale of its Australian unit, FMH, for A$776 million (S$656 million), which is significant to SingPost’s overall financial posture.
Currently, the search for Phang's replacement is underway. Meanwhile, regulatory approvals are anticipated for Isaac Mah, who currently heads SingPost’s Australian subsidiary, as the new group CFO. The chair of the board, Simon Israel, will oversee senior management temporarily.
Despite the executive upheaval, SingPost stated it anticipates minimal disruption to its postal services. Each business unit possesses operational autonomy and its dedicated leadership. The company has asserted its commitment to continuing operations and driving forward with its strategic plans, even as leadership changes are underway.
SingPost's shift toward logistics and the divestiture of non-core assets has been highlighted as integral to its future growth strategy. This strategic direction saw the company reporting impressive financial figures, posting revenues of $992.4 million for six months ending September 30, representing a 20% year-on-year increase. Earnings surged by 65.6% to $22.2 million, demonstrating operational resilience even amid leadership challenges.
Investors reacted to the dismissals with volatility, as SingPost’s stock plummeted by over 10% following the terminations. Analysts, like Ada Lim of OCBC Investment Research, have adjusted forecasts for the stock value, citing heightened equity risks. Her projections were lowered from 58 cents to 54 cents per share. Conversely, Seet holds firm on his buy recommendation, predicting SingPost will continue along its asset monetization pathway, potentially yielding significant returns for shareholders.
Seet anticipates the sales of additional non-core assets, such as the SingPost Centre and various post offices, may offer up to S$0.86 per share back to shareholders within the next two years.
The company's strategic roadmap exhibits readiness to recover and expand even as it navigates this period of restructuring. With the focus firmly placed on strengthening logistics and adjusting operational models, SingPost's leadership transition could reinforce its capability to pursue new growth avenues.
