New Zealand Post reports $6m half-year profit

New Zealand Post reports $6m half-year profit

New Zealand Post has reported a group net profit of $6m for the six months to 31 December 2017 (HY 2018) –  but added that it is still grappling with the “ongoing and accelerating letter decline challenges”.

The result for NZ Post’s core business  – which excludes Kiwi Group Holdings – was a net loss of $13m, which the company said can be “largely attributed to a marked acceleration in letter volume decline”.

Kiwi Group contributed $19m to New Zealand Post’s net profit for the six-month period, compared to $54m in the first half of financial year 2017. The year-on-year decline reflects the sale of 47% of Kiwi Group on 31 October 2016.

In a statement issued today (23 February), New Zealand Post Chief Executive David Walsh said responding to this decline, whilst maintaining service obligations, has resulted in a “very financially challenging six months”.

“Our largest sending customers are increasingly moving to online communication for their own customers, as this is now what many of us expect in a digitised world,” said Walsh.

“This is a significant challenge for NZ Post, and cannot be underestimated in terms of loss of revenue as we seek financial sustainability for this valued service.

“We did however see an increase in parcel volumes, up 9.9% on the same period the year before, with over 39 million delivered. During the Christmas period, on our busiest day we processed over 330,000 parcels, an increase of 15% from the previous seasonal record.

“The growth in parcels is evidence that our e-commerce strategy is the right one.”

To put some figures to this parcel growth: New Zealand Post delivered 39m parcels in the half-year period. This represented a volume growth of 9.9%, and resulted in a 6% revenue increase.

Walsh said that the focus for the second half of FY 2018 will be the “ongoing need to make the letters business financially sustainable, maximising the opportunities from continued growth in parcels, and furthering plans for e-commerce partnerships”.

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