NZ Post reports net profit of $141m

The New Zealand Post Group has reported a net profit after tax of $141 million for the year ended June 2016 as letter volumes continue to decline while parcel volumes and revenue increase.

NZ Post selected Paxster as its new electric delivery vehicle, with 500 to be used for the combined delivery of parcels and mail in larger towns and cities, in addition to introducing a new range of parcel delivery options to give customers more choice about where and when they receive their parcels.

The new facility for courier and postal operations in Te Rapa – the Waikato operations centre – was completed, and a building is under way on a new parcel processing facility in Christchurch, including sorting machines by Daifuku BCS.

The profit is largely due to Kiwibank and the sale of Australian subsidiary Converga to Canon Australia for $78 million, said NZ Post chief executive Brian Roche. For a second year in a row Kiwibank returned a dividend of $29 million to its parent company, the New Zealand Post Group.

Kiwibank grew customer deposits by 7.6% from $13.7 billion to $14.8 billion and grew lending and advances to customers by 7% from $15.6 billion to $16.7 billion.

“Kiwibank had a good first half performance, however this was not matched in the second six months,” said Roche.

Letter volumes continued to decline at a rate of approximately 8%, but parcel volumes and revenue were up 6.4% and 2.9% respectively. It processed nearly 10 million letters though for the two postal flag referendums.

Inbound international parcel volumes grew by 15.5%.

Excluding one offs, the postal services business made a small loss, but ongoing investment in processing and delivery technology is expected to position it well for the future

The profit for the year to June 30 was down 1.4% or $2 million on last year.

Revenue fell by 6.6% to $1,485 million and this was matched by a 6.6% reduction of expenditure to $1,335 million.

The state-owned company will pay a dividend of $5 million to the government.

Zealand Post is now in the investment phase of its business strategy, said Roche.

“It’s a leaner organisation positioned for further parcel growth, with a renewed focus of putting customer choice at the forefront of decision making.

“Margin growth was difficult in challenging market conditions but the company will continue to actively explore market opportunities to grow its core future business in parcels.”

It is now nearing 200,000 registered YouShop customers from 194,000 as at June 30.