Volume and earnings decline from letters continues
Parcels and e-commerce are buoying Australia Post’s annual results, which saw profit after tax of $134 million, up 41 per cent on the previous financial year.
Excluding property, pre-tax profit was up 280 profit rose from $19 million to $72 million
Parcel revenues came in at $3.5 billion, with volumes up 11 per cent but letter revenues fell 5.1 per cent to $2.4 billion, with volumes down 10.9 per cent.
Domestic B2C parcels and express saw revenue rise nearly 10 per cent to $2.3 billion, while road express revenues rose 2 per cent to $592 million on the back of e-commerce growth.
“While this result was pleasing it demonstrates the business has a significant challenge ahead as it continues to transform,” Australia Post group CEO and MD Christine Holgate says in her annual report statement.
“Although we continue to optimise our delivery network, we require $2 of parcel revenue to mitigate the impact of every $1 decline in letters.
“In parallel with letter volume decline, many of us are paying our bills online and large organisations are withdrawing from regional towns.
“This puts further pressure on our local post offices to serve these communities with important services, including financial transactions.”
Read the Deloitte Access Economics report on Australia Post, here
Holgate flags the need for the government-owned company to invest to cover future pressures.
“To build world-class experience we are investing in capacity and efficiency in major processing parcel facilities and across our delivery network, with over $300 million of investment in FY18 and $500 million forecast in FY19,” she states.
The firm’s investment program for the past year saw 29.4 per cent of that budget spent on asset replacement and security safety and compliance needs, with a view to “asset lifecycle management of the motor vehicles, trucks and vans, including electric vehicles, to improve safety of our fleet and reduce the number of motorcycles on our roads”.