Japan Post has unveiled a 56% rise in its net profits for the year ending March 31, 2006, drivenby massive postal savings profits. But its mail business saw profits plunge due to strong
competition from private operators.The Japanese postal and banking group, which is gearing up for privatisation from October 2007onwards, announced net profits of 1.93 trillion yen (€134 billion), up 56%. This figure alsocorresponded to the net profit of its postal savings business which benefited from rising Japaneseshare prices. Group revenues rose 11.8% to 23 trillion yen (€160 billion).
But its mail business, covering letters and parcel delivery, suffered a 99% drop to net profitsof just 200 million yen (€1.4 million). Revenues fell as private competitors increased their marketshare and mail volumes declined due to electronic substitution.
Japan Post president Masaharu Ikuta was quoted as saying that the mail delivery business needsmajor reform ahead of privatisation. Officials said the mail division could drop into the red forthe first time in four years in the current fiscal year with a loss of 5.6 billion yen (€39million).
Earlier this week, Yamato Transport, the main parcels competitor to Japan Post, announced thatit would reduce its mail delivery prices from October 1. Sagawa Express, another leading parcelsfirm, also aims to grow rapidly in the Japanese mail market.
