Parcels give impetus to Australia Post interims

Government-owned firm delivers $217 million profit in first half

Parcels give impetus to Australia Post interims
Christine Holgate forecast a full year profit before tax


Australia Post’s parcels arm is doing the heavy lifting as it reports a first half bolstered by property sales and other one-off items.

Net profits were up 65 per cent to $217 million with the extras, after revenue rose 3 per cent to $3.6 billion, while earnings before interest, taxation, depreciation and amortization (EBITDA) was up 1 per cent to $349 million

The government-owned group says parcel revenues increased 8 per cent in the period, outperforming retail sales growth.

"Competitive pressures impacted the domestic parcels earnings growth modestly, but the growth did compensate for the 10 per cent fall in addressed letter volumes," it adds.

Group CEO and MD Christine Holgate says during the first half, the business made progress in driving further operational efficiencies, achieving a further $113 million in expense savings, which helped costs to grow marginally below revenues.

"Two-thirds of Australia Post revenues are now in competitive markets and although deliveries were strong and cost savings were encouraging, trading EBITDA was flat at just 1 per cent growth," Holgate says.

"Due to the strong seasonal nature of our business we expect to again make a loss in the second half.

"We do though forecast a full year profit before tax result in-line with last year. Going forward it is critically important we focus on returning Australia Post to sustainable growth.

"In developing our new strategy it will be important Australia Post continues to meet the needs of Australians including by maintaining a healthy and viable post office network, including our Licensed post office partners.

"We are currently working to find new revenue streams for our post offices, as their role in communities becomes increasingly important to serve an ageing population and with traditional services closing branches."

The business says it continues to invest in infrastructure and customer experience whilst maintaining a healthy cash balance of $480 million with ratings agency Standard & Poors reaffirming the strong credit rating of AA- during the last six months.


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