NZ Post report “strong earnings” for the financial year

With strong financial results, a fresh new look and continued investment in our networks to keep pace with changing customer expectations, NZ Post has had an excellent year under the backdrop of unprecedented global uncertainty.

“Despite the ongoing impact of COVID-19, these strong earnings are a result of both continued growth in our parcel business and our share of an excellent Kiwi Group Holdings performance,” says NZ Post Chief Executive David Walsh.

“Much of our parcel success in 2020/2021 was due to another record-breaking Christmas, with 15.3m parcels delivered during November and December. That’s an average of six parcels delivered every second and translated to a parcel EBIT of $21m, $17m up on FY20 (when adjusting for wage subsidies received). This improvement was driven through a mix of increased parcel volumes, parcel market pricing adjustments and strong cost management. International outbound volumes were also particularly strong in late 2020 as Kiwis sent parcels overseas for Christmas,” says Walsh.

NZ Post Full Year Financial Results 2020/2021 and other highlights include:

• Net Profit After Tax (NPAT) of $32m, $26m up on FY20
• Parcel segment EBIT of $21m compared with $15m for FY20 (or $4m when excluding wage subsidies)
• NZ Post has brought CourierPost, Pace and Rural Post under the single banner of NZ Post, with a new logo and refreshed visual identity. The consolidation of our brands has resulted in a one off $41m impairment charge to write off the CourierPost and Pace brands
• FY21 was the first year of the 3-year contract for mail services with the Government, with $32m of income received, in line with our original projections.  The contract provides funding for the mail service of up to $130m for the period FY21 to FY23.

Walsh comments on the results: “The ongoing uncertainty around COVID-19 means businesses and consumers will continue to operate online – so demand for our services, and the fast and efficient movement of parcels nationally and internationally, will continue to play a growing part in New Zealand’s economic recovery.

“Our move to a single brand and refreshed visual identity supports the future growth we are expecting. We’ve been delivering mail for over 180 years and it’s still a core part of what we do, but these days we’re delivering more parcels and less mail. Parcels now account for close to 60% of our revenue.

“We knew there was confusion in the market – with New Zealanders not necessarily realising that it was NZ Post delivering their online shopping, so by bringing CourierPost and Post under the single NZ Post brand we’ve taken that confusion away. We want Kiwis to know it’s NZ Post delivering for them and we want Kiwi businesses to know it’s NZ Post supporting their eCommerce businesses to succeed.

“We are investing more than $170 million in our parcel processing and technology infrastructure. Construction is well advanced on new parcel processing sites in Wellington, Auckland and Christchurch. These sites will have state-of-the-art technology, that will scan and sort parcels at a super-fast rate.

“Ten years ago, we delivered over 1 billion mail items, which has been rapidly decreasing year on year – at the moment we deliver about 250 million items and we know this is going to continue to drop.

“Mail is still, and will continue to be, a core part of NZ Post but we are having ongoing conversations with stakeholders to make sure that the right decisions are made, that take into consideration the needs and demands of customers. This will be one of NZ Post’s strategic priorities in 2021/2022,” Walsh concludes.