Australia Post warns difficult times ahead, reports $275m net profit
AUSTRALIAN ASSOCIATED PRESS 24th October 2001
WRAP- AUST POST WARNS DIFFICULT TIMES AHEAD, RPTS $275M NET PFT
Australia Post nightlead By Sandra O’Malley
MELBOURNE, Oct 24 AAP – Australia Post today warned the present economic climate would make it difficult to maintain its current profitability as it handed its government owners $274.5 million in dividends.
According to its annual report tabled in Federal parliament today, Australia Post delivered a net profit of $274.5 million in the year to June 30, 2001, up six per cent on the previous year.
Its total payout to the Commonwealth jumped 76 per cent and comprised an ordinary dividend of $164.7 million and a special dividend of $109.8 million.
Australia Post chairman Linda Nicholls said the result was a major achievement in the face of a difficult trading environment and economic downturn.
“Our earnings performance places us in the top 10 of Australian public-listed companies and, when we look internationally, we are the best performing post office in the world,” Mrs Nicholls told AAP.
The record pre-tax profit of $402.1 million came despite flat revenues of $3.7 billion, as the corporation absorbed the introduction of the GST on standard domestic letters and 45 cent collectible stamps.
“In the current economic climate, the corporation is facing challenges to maintain its current profitability,” the annual report said.
“While its 45 cent price freeze on the standard letter rate and flow-on impacts of the GST continue, ongoing cost reductions will continue to be a key focus.”
The standard letter price has been frozen for almost 10 years now and Mrs Nicholls said it was not due for review until 2003.
Despite its competitive prices, Australia Post recorded a 2.1 per cent decline in domestic letter volumes and a 3.5 per cent drop in domestic parcel volumes.
“The decline in letter volumes we experienced during the year is very much related to the economic downturn,” Mrs Nicholls said.
“That is not to say the internet hasn’t had an effect on postal services generally, but in terms of explaining the decline in letters and parcels this year, by far the biggest impact is the economic downturn.”
Mrs Nicholls expected mail volumes to grow by about one per cent this year, noting ordinary letters only account for about 15 per cent of earnings.
Australia Post has put in place a three-pronged strategy to deal with current difficult environment.
It planned to defend and extend its core businesses, while establishing leadership positions in new markets and also leveraging its existing skills base into new businesses.
“We look to growth in new services such as logistics to counter declining growth in mail volumes and profit margins due to our price freeze,” the annual report said.
Aside from its financial performance, Australia Post has beefed up its security measures to deal with local anthrax scares.
“We have become increasingly vigilant in our operations,” Mrs Nicholls.
The service has so far had 35 lost time incidents when a potential problem was identified but anthrax had not been discovered in any of those cases.
“Our vigilance continues,” Mrs Nicholls said.
In the United States, two postal workers have died and a number have been infected by the biological threat.
