New Zealand Post Group records NZD 38.2 million half-year profit

The New Zealand Post Group has reported an unaudited after-tax profit of NZD 38.2 million for the six months to 31 December 2006 – up 10% on the NZD 34.7 million profit for the same period in 2005.

Operating revenue for the half year was NZD 616.7 million (2005: NZD 565.4 million) and operating expenditure NZD 561.9 million (2005: NZD 515.9 million).

The company will return an interim dividend of NZD 20.3 million (2005: NZD 16.7 million) to the Government shareholder.

New Zealand Post Group Chief Executive John Allen said the result was largely driven by the continued strong performance of Kiwibank and Express Couriers Limited (ECL) – the 50% owned joint venture that was formed with DHL in 2005.

Mr Allen noted that a focus on innovation to better meet customer needs continues throughout the group.

“New services like the Prezzy Card launched in PostShops in November, mobile banking through Kiwibank and our Real Aotearoa stores which stock collectables and stamps alongside quality New Zealand souvenirs are just some of the new ways we’ve continued to diversify our offerings over the past six months,” explained Mr Allen.

“In addition, New Zealanders are continuing to be attracted to a genuinely New Zealand-owned bank. Kiwis are thinking as much with their heads as their hearts – they are going after innovation, low rates, accessibility and quality of service,” Mr Allen said.

During the period, Kiwibank more than doubled its after-tax profit to NZD 11.4 million – compared to NZD 5.4 million for the same period in 2005. Mr Allen said more than 500,000 customers have now joined the bank.

Within the Postal Services business, the amount of domestic mail sent continues to decrease – down 2.9% in the six months – but this has partly been offset by growth in parcels. This changing mail mix means delivering larger, heavier items to more mail boxes around the country and this continues to place pressure on the business to manage increasing costs while maintaining a high standard of mail delivery. International mail items continue to grow.

The Postal Services’ programme to modernise mail processing continues with new processing machines commissioned in Wellington and Dunedin. A new purpose-built mail centre in Hamilton will be the next to use the new machines later this year while further purpose-built mail centres are under construction in Auckland and Christchurch.

Mr Allen said the company expects strong competition across all parts of the business and ongoing pressure on mail volumes in the next six months. “However we will continue to explore growth opportunities and refine how we operate to keep pace with changing markets always with the goal of developing sustainable practices to meet the current and future needs of our customers.”