New Zealand Post is still struggling with falling mail
volumes. Photo by Craig Baxter.
An after-tax profit of close to $100 million by Kiwibank
helped New Zealand Post lift what would otherwise have been an
ordinary profit for the year ended June.
NZ Post reported an operating profit of $65.3 million for the
period, down 24% on the $85.8 million reported in the
previous corresponding period (pcp).
However, after gains on sales were taken into account for
both periods, the profit before tax was lifted to $122.2
million this year compared with $190 million in the pcp.
This year, NZ Post received nearly $72 million for the sale
of an investment in an associate and $3.8 million from the
sale of an investment in a jointly controlled entity. Last
year, the company received more than $102 million from the
sale of an investment in a jointly controlled entity.
This year, the company paid only $1.25 million in tax, a 1%
payment on its before-tax profit, compared with a 19% tax
payment last year.
The reported after-tax profit for the period was $121
million, compared with $170 million in the pcp.
The group will pay an unchanged $5 million dividend to the
NZ Post group chief executive Brian Roche said the operating
performance was driven by a solid financial result from the
Kiwibank businesses and growth in the courier segments of the
The postal segment continued to face an accelerating decline
in mail volumes, further highlighting the need for
fundamental changes in how services were delivered.
The group earlier announced the Dunedin mail centre, in
Strathallan St, would close with the possible loss of 73
jobs. Service centres in Wanaka and Queenstown would also be
Mr Roche said the result partly reflected the first year of
the return to full ownership of Express Couriers, which
operates the CourierPost and Pace services.
Express Couriers reported an after-tax profit of $17 million.
''Express Couriers' result in a highly competitive market was
encouraging. There is significant growth potential in our
express delivery business for parcels and time-sensitive
Kiwibank achieved an increase in market share in a relatively
static credit environment, he said.
Bad debt expense was improved by the release of several large
specific provisions after successful resolution of those
''Our financial services portfolio continues to be a key
growth driver for the group. That growth and Reserve Bank
regulatory requirements create the demand for more capital.''
Kiwibank's own earnings, planned market issuances and support
from the group would meet those demands in the
Discussions around the long-term capital support for the bank
were ongoing, Mr Roche said.
Postal business revenue fell $30 million, the fall in postal
volumes accelerating from 6.7% to 7.5%.
There were 63 fewer items in the postal network than in the
Tight cost management enabled the letters business to
''essentially break even'' at an operating level. However,
consistent with global trends, the rapid decline in the use
of letters as a means of communication was placing increasing
pressure on the service, he said.
While there continued to be opportunities for the group's
mail and communications business, fundamental change was
required in the network to adjust to changing customer
preferences and access those opportunities.
Reconfiguring the mail processing network and exploring
digital solutions were only part of the solution.
There remained a pressing need for greater flexibility in the
deed of understanding in respect to delivery and the retail
store network, Mr Roche said.