Can Singapore Post Limited Continue To Perform With Its CEO Leaving?

If you have not heard, Singapore Post Limited (SGX: S08) announced last week that its Chief Executive Officer, Dr. Wolfgang Baier, has resigned.

Dr. Baier has been in his current role with Singapore Post since 2011 and has been instrumental in pushing out the strategy of increasing the company’s international business and diversifying the firm away from its traditional mail services.

During his tenure, Dr. Baier went on an acquisition spree, which culminated in Singapore Post’s overseas revenue contribution increasing from just 11.5% in FY2011 (fiscal year ended 31 March 2011) to 32.5% in FY2015. The company also managed to reduce the revenue contribution from its mail business from 59.2% to 50.8% over the same period.

However, it is yet to be seen if the acquisitions and the company’s transformation will actually have a positive impact on the bottom-line. In terms of operating profit, the contribution from Singapore Post’s mail segment actually increased from 68.6% in FY2011 to 77.3% in FY2015.

Over the same period, the logistics segment is the only one that has grown its operating profit significantly. To that point, the logistics segment’s operating profit had stepped up by 12% annually from S$13.7 million (FY2011) to S$21.5 million (FY2015). Both the traditional mail and retail segments have had relatively stagnant operating profit in that timeframe.

Now with Dr. Baier leaving Singapore Post by 30 June 2016, there might be a few threats awaiting the company: Having made multiple acquisitions globally over the past few years, will the firm face a challenge in integrating its acquisitions seamlessly? Singapore Post’s new strategy as set by Dr. Baier appears to be a work in progress; will a new leader change the direction of the company drastically?

There’s no easy answer for the questions above and we would only know for sure once a new CEO steps in and announces his or her future plans for the company. Although Singapore Post continues to be a company with interesting and promising prospects for the future, the resignation of its CEO has definitely increased the immediate risks associated with investing in it.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim doesn't own shares in any companies mentioned.