Japan Post sees setback in revenues in all 3 divisions

Japan Post said Wednesday its operating revenue shriveled to 20,633.3 billion yen in fiscal 2004, down 16.1 percent from the previous year, as its three business divisions in charge of mail delivery, postal savings and postal life insurance fared poorly.

In the business year ended in March, Japan Post made a net profit of 1,234.7 billion yen, down 46.4 percent but still well above Toyota Motor Corp.’s 1,171.2 billion yen net profit for the same year.

However, the decreased revenues in all the three divisions represented its weak profitability, a factor expected to help those against the government’s plan to privatise the public entity.

Revenue in the mail delivery, postal savings and postal life insurance businesses totaled 1,933.0 billion yen, 4,098.9 billion yen and 14,665.0 billion yen, dropping 2.0 percent, 30.2 percent and 13.0 percent, respectively.

The operating profit margin for the mail delivery division was 1.4 percent at the end of fiscal 2004, far below the 4.7 percent for Japan Post’s principal rival, Yamato Transport Co.

“We have a lot to do in transforming our business into one capable of making profits,” Japan Post President Masaharu Ikuta told a news conference.

Japan Post’s fiscal 2004 earnings report, which has yet to be audited, showed a net profit of 25.2 billion yen in the mail delivery service, losing 4.2 percent but securing a profit for the second straight year.

The profitability of the mail delivery business came as the number of parcels handled by its “Yu-Pack” door-to-door delivery service leaped 17.8 percent. That more than offset a 5.3 percent fall in the delivery of regular mail fueled by widespread use of e-mail and intensifying competition.

Of Japan Post’s two other services in addition to mail delivery, postal savings chalked up a net profit of 1,209.5 billion yen, down 46.8 percent.

In the postal life insurance business, which saw a substantial drop in the number of new contracts, Japan Post added 551.7 billion yen to internal reserves, up from the previous year’s 4.1 billion yen.

Japan Post’s capital-to-asset ratio increased to 1.6 percent from 1.1 percent after incorporating retained earnings into its capital.