New Zealand Post has increased its net profit for the financial year 2007/2008 ending 30 June by26.9% to $110.2 million (€51.85 million) despite high fuel prices, an international credit crunch
and generally declining consumer activity in the economy.The profit rise is mainly a result of the good performance of NZ Post’s subsidiary Kiwibankand a non-recurring gain of $24.8 million (€11.69 million) from the creation of the company’s jointventure with DHL “Express Couriers Australia” in July this year as NZ Post sold two of its businessto the newly created joint venture. NZ Post sees a significant growth opportunity in the Australianmarket where it can operate on a lower cost structure than many competitors.
NZ Post’s revenue went up 7.9% to $1.29 billion (€608.1 million). The net earnings for theprevious financial year ending to 30 June 2007 have been restated under the New Zealand equivalentsto International Financial Reporting Standards (NZ IFRS), adopted by New Zealand Post on 1 July2007, from $70.2 million (€33.1 million) to $86.8 million (€40.92 million).
NZ Post’s CEO John Allen said that in addition to a strong contribution from Kiwibank, NZPost’s Datamail Group did better than expected. “However, traditional postal and retail businesseswere affected by the economic slowdown during the second half of the year”, he added.
In contrary to increased net profit and revenues, NZ Post’s postal services segment reporteda fall in revenues from operations to $840.2 million (€396.1 million) from $846.6 million theprevious year. Profit for the segment was down to $58.7 million (€ 27.67 million) from $68.9million for the same period last year.
Mail volumes were down 1.5% while parcel volumes grew 1% last year. In the past six months NZPost’s fuel bill was $5 million higher than budgeted contributing to the downward trend.
Looking ahead, John Allen expected the first six months of the new financial year to be “verychallenging”, but the long-term outlook was positive because the business had diversified frompostal services into banking and courier services.
Despite the economic headwinds which would impact the first half of 2008/09, he expected thecompany’s earnings to grow from NZ Post’s investment in technology and capability during the pastfive years, as well as from the underlying strengths of the group’s distribution infrastructure andconsumer brands.
