Australia Post is celebrating an improved performance in its 1HFY25 interim report, and has recorded a 641.4 per cent increase in profit when compared to 1H24.
The huge increase in profit, which stands at a total of $249.1 million (compared to $33.6 million in 1H24) has been driven by a record peak period and the successful delivery of a number of Post26 transformation initiatives.
Overall parcel delivery increased three per cent in the period to a total of over 262 million, but letter delivery continued its downward trend with an over 10 per cent – or 98.2 million unit – deduction over the half.
Much of Australia Post’s staggering increase in profits came through the continued streamlining of its operations due to its Post26 strategy, which accounted for $87.2 million in savings due to the removal of costs and closing of non-core businesses.
Australia Post Group Chief Executive Officer and Managing Director Paul Graham says the proof of progress in the company’s Post26 strategy is evident in the financial results.
“These results demonstrate the material improvement we’ve achieved across most areas of the business as we execute out Post26 strategy and implement modernisation reforms,” Graham says.
“This would not have been possible without the support of our 64,000 team members who day after day, deliver for our customers and the community.
“We remain focused on transforming the business to secure our long-term viability. I would like to acknowledge the support of the Communication Workers’ Union, who continue to work collaboratively with us as we have rolled out the New Delivery Model to more than 119 sites nationally to date.
“The combination of Post26, modernisation reforms and a record peak period has meant the business has responded positively in the short-term changes we have made.
“However, despite the improved performance, the business is still facing a significant number of structural and competitive headwinds.”
Parcels revenue in the period increase six per cent to $3.53 billion, with a peak Cyber Weekend and Christmas period accounting for 102.8 million parcels delivered.
A recent Australia Post survey found 70 per cent of Australians purchased Christmas gifts during the Cyber Weekend sales which helped contribute to the three per cent peak period growth.
“The parcels sector is becoming increasingly competitive,” Graham continues. “We see global disruptors making significant investment in Australia, along with a rise in new entrants and start-ups.
“While the eCommerce industry is still experiencing modest growth, Australia Post is competing against providers who don’t make the same important contribution to Australia’s job market, economy and community wellbeing that Australia Post does and will continue to do.”
Despite the improved profitability of Australia Post’s parcel delivery service and overall product, Graham says the continuing decline in its letter service will see it continue to run at a loss.
Declining letter volumes saw the segment register a loss of $83.7 million, while the sale of domestic seasonal stamps has dipped 72 per cent since 2017.
“As we are seeing globally, letters volumes are falling,” he says. “This is expected to continue at pace.
“We do not anticipate the letters service will ever return to profitability.
“In this environment of increasing competitive headwinds and ongoing structural challenges, further reform is required to ensure the long-term relevance and financial sustainability of Australia Post.
“The outlook for the second half remains challenging and we cannot afford to be complacent because we have seen improvement in our first-half bottom line, which is traditionally profit-making.
“Competition is intensifying, and our traditional revenue streams are shrinking.”
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