Australia Post delivers
Government nets AUD140M final dividend
Fired by solid growth in its parcels and logistics business, Australia Post generated a record net profit of AUD367.9 million in the 12 months to the end of June.
The Australia Post accounts were meant to be tabled in Federal Parliament today, but were inadvertently disclosed a day early after an error was made by the tabling officer of the Senate.
While the bottom line is 7.8 per cent up on the 2005 performance of AUD341.3 million, the board of the state-owned corporation has declared a lower final dividend to be paid to the Federal Government.
According to a note in the annual accounts, AP will pay the Government a final dividend of AUD140.8 million — AUD15 million lower than the 2005 distribution.
The result was founded on a big increase in total sales revenue which eclipsed AUD4.5 billion for the first time.
AP is now one of the most profitable postal enterprises in the world, generating an annual return on equity of almost 19 per cent.
AP’s new chairman David Mortimer said the results highlighted the corporation’s ability to meet the evolving needs of customers.
“Australia Post is positioned well for an exciting future,” he said.
“We achieved healthy commercial results, while substantially increasing the quality and range of services for our customers — both in Australia and overseas.”
Mr Mortimer said AP was beginning to reap the rewards of the ongoing focus on parcels and logistics.
Revenue from the parcels and logistics division was up 18.6 per cent, mainly due to exponential growth in international parcels and logistics.
One of the businesses in the division, Post Logistics, increased sales revenue by 75.4 per cent.
It provides international supply chain services including Customs clearance, freight forwarding and warehousing to corporate exporters and importers.
A joint-venture logistics business with China Post is expected to boost returns from Post Logistics over the next five years.
AP is well positioned to expand its international operations through borrowings this year, after reducing its gearing ratio to below 20 per cent in 2006.
However, the corporation’s retail businesses, which include its bill payments, banking and philatelic services offerings, suffered a 3.2 per cent decline in revenue.
Notwithstanding, the profitability of the retail division rose 7.1 per cent on the back of improvements in stock management.
The traditional core business — letters — grew revenue by 2.7 per cent on overall volume growth of less than 1 per cent.
Managing director Graeme John said the letters division contributed 58 per cent of AP’s revenue.
“Our results show that Australians still enjoy one of the most reliable and cost-effective letter services in the world,” he said.
