Higher Mail volume lifts New Zealand Post profit
State-owned New Zealand Post made a net profit of $19.6 million in the six months to December, up 22.5 per cent on the second half of 2001.
Acting chief executive John Allen said yesterday that a 0.6 per cent increase in domestic mail volumes, driven by high business mail volumes, contributed to the result.
Domestic mail volumes increased by 0.8 per cent over the past 18 months, arresting a two-year decline.
“That’s extraordinarily positive for the business,” he said.
Volumes of unaddressed advertising mail, parcels and courier items also grew.
Allen said the increases reflected the strength of the economy and demonstrated the value customers continued to place on mail as an efficient and effective communications tool.
However, he said that the first six months of this year would be challenging for the letters business because of a slowing domestic economy and the war in Iraq.
NZ Post was particularly happy with the performance of its Kiwibank subsidiary, which last week announced a loss for the six months to the end of December of $6.5 million.
Kiwibank was growing strongly after opening just over a year ago, and with more than 115,000 customers the bank had far exceeded forecasts of customer numbers.
The target after three years had been 165,000 customers.
“The enthusiasm with which New Zealanders across the board have embraced Kiwibank, has been a stunning achievement for the bank team.”
Allen said Transend Worldwide continued to “refocus” its business by concentrating on smaller contracts in specific regions.
“We have restructured the business, we have significantly lowered its cost. We have put in place the guidelines necessary to ensure that it’s operating appropriately.”
Transend now has just 13 staff, out of NZ Post’s staff total of 9400, after claims of big-spending from high-flying executives and a damning Auditor-General’s report in December.
Allen said there had been good cost containment across the group, which had contributed to the improved profitability. Operating revenue was up $4.9 million at $516 million on higher mail volumes, while operating expenses fell $6.6 million to $476.8 million.
NZ Post will pay an interim dividend of $11.8 million, or 60 per cent of net profit, compared with $9.6 million for the same period in 2001.
NZ Post chief executive Elmar Toime resigned in December to take up a position as executive deputy chairman with Britain’s Royal Mail.
Allen said the board probably would choose a replacement next month. He confirmed he was a candidate.
