New Zealand Post delivers $71.8m profit in challenging year
Declining economic activity blamed for lower revenues as New Zealand Post delivers a mixed message regarding its financial results.
Announcing the financial results for the year ended 30 June 2009, the chairman, Rt Hon Jim Bolger ONZ, said that while parts of the Group, particularly Kiwibank, continued to thrive, others including Postal Services, Datamail and the courier joint ventures had been affected to varying degrees by the economic downturn.
The current year’s profit compares with the $110.2m net profit delivered in the 2007/08 financial year, however the two results are not directly comparable because of the unprecedented economic situation during 2008/09 and one-off gains in 2007/08, he said.
Normalised earnings, after adjusting for various one-off items, amounted to $77.2m 2008/09, a 16 per cent decline on a normalised 2007/08 result of $91.9m.
Bolger said the current result also reflected lower revenues due to declining economic activity, as well as substantial costs incurred in the challenging economic environment. These included higher bad debt provisioning for Kiwibank of $12.2m, compared with $2.9m in the previous financial year.
“While the New Zealand Post Group has not been able to achieve its financial performance targets, taking into account the most difficult trading conditions we have seen in six decades, the Group overall has performed reasonably well,” he said.
Continued erosion of traditional postal volumes in New Zealand and internationally by electronic substitution and competition was worsened by the significant impact of the global recession on mail flows as business activity and associated mailings slowed. Over the 2008/09 year, the Postal Services Group experienced a 6.7% decline in total addressed mail volumes – or over 65m items.
Knowles said the earnings contribution from the Postal Services business, which includes New Zealand Post’s retail network of PostShops and PostCentres throughout New Zealand, declined from $67.3m in 2007/08 to $25.4m.
“This has required us to broaden measures to strengthen the sustainability of this part of the Group’s business,” he said.
Knowles noted that most of the 26 changes made to PostShop Kiwibanks during the year involved new or upgraded stores offering improved levels of service. The network of 953 PostShops and PostCentres, as at 30 June 2009, significantly exceeded the 880 retail outlets to which the Company was committed under its Deed of Understanding.
In addition to its financial performance, the New Zealand Post Group would maintain a strong focus on its award-winning corporate responsibility programmes in support of its business vision to be ambitious for New Zealand and to help the country grow in a sustainable way.