Australia Post parcels gains fail to staunch red ink

Letter decline overlays poor performance in rest of the government monopoly

Australia Post parcels gains fail to staunch red ink
Ahmed Fahour sees Australia Post facing international competition in parcels.


Beset by surging competition, Australia Post’s express delivery transformation is falling foul of its letters operation and other failing aspects of the business.

Its first-ever loss – $222 million, down from a profit last financial year of $116.2 million – saw letter volumes slip 7.3 per cent and division losses rise to $381 million.

This first loss in 30 years comes despite parcel revenues rose 3.6 per cent to $3.21 billion and the expansion of parcel handling facilities in Sydney and Melbourne.

Revenue was stable year-on-year at $6.37 billion.

"As we had forecast, this has been a challenging but crucial year of transition for our business, reflected in the numbers," CEO Ahmed Fahour says

"We continue to make headway with reforming our letters business and we are investing in the infrastructure and digital capabilities – vital to servicing the changing needs of our customers.

"We are confident we have the resources, infrastructure and support in place to manage the ongoing transition of our letters business as we become a more eCommerce-centric organisation."

The bad news might not be over, though, with Fahour signalling domestic and international competitors in the country were ramping up their challenge to Australia Post’s leading position.

"The parcels business continued to be challenged, despite revenue growing year-on-year, in a highly competitive market where domestic freight providers are building capacity and international competitors acquiring sorting and last-mile delivery capabilities in Australia," he adds.

"Despite increasing competition, for the first time ever our parcels business delivered more than half of total revenue. We are well positioned to continue our strong support for Australian business and consumers."

More details will be contained in the annual report to be tabled in federal parliament later in the year.

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