Australia Post today unveiled a near-11% rise in net profits in the year ending June 2013 thanksto strong growth in parcels but warned they could not compensate for broadening mail losses
indefinitely.The group also profited from the full takeover earlier this year of B2B express delivery companyStarTrack, formerly a 50-50 venture with Qantas.
Australia Post’s revenues increased by 15% to A$5.9 billion (€4.16bn) in the year ending June30, 2013. Pre-tax profits improved 10% to A$403 million (€284.5m) while net profits were 10.9%higher at A$312 million (€220m).
The non-regulated parcels and retail services businesses continued to be the key driver of bothrevenues and profit for Australia Post, helping to offset the substantial and accelerating lossesin the traditional mail business, Australia Post Managing Director and CEO Ahmed Fahour saidfollowing the tabling of the Corporation’s 2012/13 Annual Report in Parliament. Overall, the ‘non-regulated’ commercial business activities improved combined profits by 16.7% to A$648million.
“Our parcels business – bolstered by the acquisition last year of the remaining 50% stake inStarTrack – remains the key driver of revenue and profit growth for Australia Post,” hecommented.
Australia Post’s parcels business increased domestic volumes by 9.3%, generating underlyingrevenue growth of 8.4% to A$2.7 billion. With the addition of the StarTrack business, parcelprofits grew strongly by 29.1% to A$355 million.
“Service performance in our regular parcels business remained strong with 98% of our parcelsdelivered on-time or early and 99% of our Express Post products being delivered on time,” Fahourpointed out.
Despite a challenging retail market and declining foot traffic, Australia Post’s retailbusiness, with 4,429 outlets across the country, grew profit by 12.9% to A$200.6 million andincreased customer satisfaction levels. “Furthermore, we have rolled out Australia’s largestnetwork of 108 parcel lockers for 24/7 access to online purchased items across the country,reaching 7 million customers within 10 minutes of their homes,” Fahour said.
In contrast, mail volumes dropped by a further 5.4% in 2012/13 due to electronic substitution.With stamp prices unchanged for the last three years, mail revenue declined by 4.5% to A$2.2billion and losses in the domestic mail business widened by almost 60% to A$187 million. Theregulated mail business loss broadened by 17% to A$218.4 million in the last financial year.Despite this steep and large loss, mail service performance remained high with 96% of bulk andordinary mail delivered on-time or early.
“These negative volume trends in letters will continue and the cost to deliver on our CommunityService Obligations will also continue to grow constraining our ability to continue to deliver anefficient and cost-effective service for Australian consumers and businesses,” Fahour said.
The CEO warned: “If unchanged, the widening losses in our traditional letter services willeventually stifle positive developments in our parcels business. Despite our very strong financialand operating results, Australia Post has hit a turning point in its business trajectory wherestrong cost management and our A$2 billion investment in our national logistics network will soonnot be enough to compensate for the losses we make in our traditional mail business.”
Australian media were quick to speculate that these comments signalled plans to raise stampprices in order to increase mail revenues.
