We expect SingPost growth to be more in competitive and lower
Singapore Post Ltd
Dec 05 Canada Goose Online Mult. CUSIP6: 82929NThe rating on Singapore based postal and logistics services provider . (SingPost) reflects the company very strong domestic market position, high operating efficiency, and solid cash flow protection measures relative to net debt. Rating canadian goose jacket weaknesses include SingPost geographic canada goose factory sale concentration, limited growth opportunities for its core postal services business, and margin pressures.
We assess SingPost business risk buy canada goose jacket cheap profile as The company has a very strong canada goose uk shop market position in the competitive domestic and international mail business in Singapore. SingPost mail business contributed 65% of its canada goose revenues and 73% of canada goose uk outlet its operating profit for the second quarter ended Sept. 30, 2012.
SingPost solid cash flow measures relative to its net debt underpin its financial risk profile. The company gross leverage has increased significantly since March 2010. The ratio of gross debt to uk canada goose EBITDA was 4.3x as of Sept. 30, 2012, compared with 2.1x as of March 31, 2011. The deterioration was due to SingPost issuance of Singapore dollar (S$) 350 million in senior perpetual cumulative securities in March buy canada goose jacket 2012. According to our hybrid criteria, we consider the securities to have equity content and therefore treat all of the principal of the Canada Goose sale securities as debt and all the distributions as interest when calculating SingPost financial ratios. However, on Canada https://www.goosesale.ca Goose Parka a net basis, the company ratio of net debt to EBITDA was only 1.2x as of Sept. 30, 2012. For this calculation, we have not factored in S$80 million in cash that we estimate the Canada Goose Outlet company requires for canada goose coats its operations. SingPost still uk canada goose outlet retains the majority of canada goose clearance the proceeds canada goose black friday sale from its notes issues in 2010 and 2012. It is likely to use these proceeds to meet future investments canada goose clearance sale and debt maturities in April 2013.
We believe that Canada Goose Jackets SingPost will invest in other businesses to counter the limited growth opportunities available to its postal services business. However, the company more aggressive growth strategy, when executed, could undermine its credit profile. We expect SingPost growth to be more in competitive and lower margin businesses. This is likely to weaken the company profitability, but increase its exposure to industry risk. In addition, expansion could compound the impact of a cheap canada goose uk longer term weakening of the business risk profiles of postal canada goose store operators due to the structural decline in traditional mail businesses. This in turn canada goose coats on sale would minimize any benefits from a more diverse business structure.
We expect SingPost operating margins to remain under pressure, given rising costs in existing businesses and the company strong commitment to growth. EBITDA margins declined Canada Goose Coats On Sale to 33% for the 12 months ended Sept. 30, 2012, from 36% for the fiscal year ended March 31. 2012. This deterioration was due to increasing operational expenditures to build capacity for future revenue growth.
SingPost weaker profitability and growth strategy have increased the company debt tolerance. canada goose outlet store locations This is because the company has minimal positive discretionary canada goose uk black friday cash flows to fund expansion over the next two to three years. We expect the company liquidity sources (including cash, FFO, and available credit facilities) to cover its uses over the next 12 months by more than 1.5x, even if EBITDA declines by 30%. Our liquidity assessment incorporates the following expectations and assumptions:
As of Sept. 30, 2012, SingPost sources of cash include:
Cash and cheap Canada Goose equivalents of S$632.4 million. This includes about S$150 million from the company S$200 million Canada Goose online fixed rate note issuance in March 2010, about S$350 million from its senior perpetual cumulative securities issuance in March 2012, and S$74.8 million in financial instruments that mature within the next 12 months.
