Australia Post today announced a 31% pre-tax profit rise in the year ending June 30, 2011,thanks to its successful ongoing transformation plan, including a greater focus on parcels and
e-commerce, but warned it still faces many challenges.The state-owned postal operator stabilised its business with a pre-tax profit of A$332.3 million(€244.9 million), up from A$253 million (before restructuring provisions) in 2009-10. However, thiswas lower than profit levels in the years up to 2009. Consolidated revenues rose 2.8% to a new highof A$5 billion (€3.68 billion).
The core mail business made a loss of $91.3 million with volumes of 5.03 billion items, down by3% for the fourth year in a row. Letters revenues increased 2.6%, mainly due to a 5% rise in thebasic postage rate in July 2010. The letters business has now been in the red since 2007.
In contrast, the commercial non-reserved services made a combined profit of $405 million, up18.7% on last year. This was largely driven by growth in parcels and trusted services such asfinancial and identity services. The parcels business increased volumes by 10.9%, increasedrevenues by 5.3% and improved its profits by 36%. International outbound parcel volumes declinedbut higher prices generated better profitability. Inbound parcels, however, operated at a loss dueto low UPU-set reimbursement rates for small parcels under 2kgs, the company noted in its annualreport.
Chairman David Mortimer said the result was impressive at a time when many other postal servicesaround the world faced precarious financial positions and were implementing significant servicecuts. “I’m especially pleased that, despite the global decline in mail, our management team havestabilised the business and have begun the work to reposition us for a return to growth in thefuture.”
Managing Director and CEO of Australia Post, Ahmed Fahour, said that profit had increased indifficult trading conditions and had been achieved while exceeding Australia Post’s CommunityService Obligations. “Our revenue, up 2.8% on last year, grew faster than our costs, up 1.2%. Thisis the first time in four years that our revenue growth has outstripped our cost growth and it hasbeen achieved while maintaining very high standards of community service, with 96% of lettersdelivered on time or early and the number of retail outlets increasing to 4,419,” he said.
Fahour said with the launch of Future Ready in April 2010 the business had shifted its focustowards online shopping as the future growth engine of Australia Post, with a particular focus onhelping Australian businesses get online.
“Our focus on e-commerce has been vindicated as we’ve experienced overall parcel volume growthof 10.9% which drove parcels revenue up 5.3% and resulted in a 36% growth in profit over the past12 months. This is only going to continue as online retailing in Australia continues to grow at arapid rate,” he said. “With more and more people sending and receiving parcels, we are takingsignificant steps to make it convenient for Australians to send and receive parcels at a time andplace that suits them and helping Australian small businesses to cash in on the online shoppingboom.”
Australia Post recently announced its innovative investment in the parcels business in responseto the internet shopping boom. New delivery options will include the ability for customers tocollect parcels from an initial 100 extended hours locations across Australia, as well as the trialof new parcel lockers available 24 hours a day, 7 days a week, with customers receiving email andSMS notifications when their parcel arrives.
Fahour added that Australia Post is continuing to grow the range of trusted services it offersto provide customers with greater access, convenience and choice. Australia Post experiencedrevenue growth of 2.8 % in its retail agency services and merchandise portfolio, adding 18 newidentity services to the 750 business and government bodies it acts as an agent for. “This growthin our retail portfolio is especially pleasing given the depressed retail environment and thenatural disasters which have impacted many of our post offices this year,” he said.
But while there is much to be proud of, Fahour said that the business is only part of the wayalong the path to renewal and there is still plenty to be done. “This year’s results only return usback to our 2009 profit level and, while Australia Post’s commercial non-reserved service made aprofit of $405.3 million, the reserved letters service still lost $91.3 million,” he said.
