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New Zealand Post is working quickly to move into the digital age as fewer letters are posted and customers look for change.
The company last Friday reported a much-improved operating profit for the six months ended December of $41.6 million, up from $13.2 million in the previous corresponding period (pcp).
However, group chief executive Brian Roche said the improvement in the result, while pleasing, was in line with expectations and not a case of "turning the corner".
NZ Post faced the challenge of operating in a flat economic environment with residual effects of the Christchurch earthquake and the ongoing uncertainty in the global economy.
"The improved result does not alter the urgency and need to maintain momentum for NZ Post to pursue its strategies of delivering a sustainable postal network for the future, growing Kiwibank, creating new digital offerings and recreating our store network to meet modern consumer needs."
Operating revenue increased by $27.7 million to $697.7 million in the period, with Kiwibank being the significant contributor, Mr Roche said.
The postal business experienced continued decline in letter volumes and performed close to plan. The courier and logistics business provided a solid contribution to earnings.
Group costs were on track.
The Government would receive an interim dividend of $2.5 million compared with $1.8 million in the pcp.
Mr Roche said NZ Post was finalising a plan of action to ensure the company could operate a physical network that was sustainable and addressed the fundamental change technology was making to customer behaviour.
"We have made good progress in the past six months in testing new technology and systems to begin changing our store service network to provide customers with accessible services, matching their changing lifestyle and ways of doing business."
Testing in the store network had included self-service postal and bill-payment kiosks being introduced and the establishment of pilot stores with simplified product ranges and streamlined processes, he said.
Progress had been achieved in the development of digital services, which would play an important part in the group's strategy to meet the challenges faced by its primary business sectors.
The half-year results reflected where NZ Post expected to be and were the result of good cost management and encouraging growth in Kiwibank.