Australia Post says “urgent help” needed to address mail volumes

Australia Post says “urgent help” needed to address mail volumes

Australia Post has announced its financial results for FY19 – Group Profits $41 million, down 67% from $126 million impacted by significant letter losses.

This financial year, letter revenues declined almost 9% to $2,216 million and losses from this business increased to $192 million. Fixed costs to operate the letter business continue to rise with increasing delivery points, although there has been no increase to the Basic Postage Rate in over three years, when Australia Post delivered 822 million more letters.

“It is important letter pricing is addressed responsibly to ensure essential community post services are protected. Without an increase to the Basic Postage Rate, Australia Post will no longer be able to afford to fully subsidise the losses from the important post business, which would risk the closure of community post offices and a reduction in services,” Ms Holgate added.

“Australia Post is absolutely committed to honouring our community obligations and appreciates the essential role we play in communities, but urgent help is required.”

Letters aside, Australia Post earned over $4,774 million in Parcels & Services revenue in FY19, representing 68% of total revenue. The letters business now accounts for just 32% of total revenue at $2,216 million, impacted by falling letter volumes. The business has changed from primarily providing a community service to operating in a highly competitive market.

In FY19 the business achieved several significant milestones as the strategy progressed and transformation continued. Domestic parcels grew 9.2 % to $3,181 million, confirming Australia Post’s e-commerce leadership position. The international parcel business grew 15.7 % to $586 million, underpinned by the successful consolidation of the global ecommerce business APG. Financial Services and Identity Services generated over $500 million revenue.

“This year we saw record domestic and international parcel revenue as more and more customers are choosing Australia Post as their preferred partner to deliver their e-commerce ambitions,” said Australia Post Group Chief Executive Officer and Managing Director Christine Holgate.

“We also signed the historic [email protected] community agreements this year, first with Commonwealth Bank, NAB and Westpac, and now more than 70 financial institutions have signed on. The Community Representation contribution will enable customers to continue to conduct essential banking transactions in 3,500 Post Offices across Australia using the [email protected] service.”

Australia Post has forecast that although Group revenue will grow in FY20, there will be continued pressure on profitability due to the ongoing impact of letter losses.

“As a business it is critically important we remain focussed on growth opportunities – to do this we must continue to adapt and evolve to support our changing customer requirements. This includes opening the largest parcel processing facility in the Southern Hemisphere in late 2019, as well as launching new customer innovations, while we continue to keep a tight internal focus on costs.” Ms Holgate said.

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