Australia Post delivers profit
The government-owned service has posted a 3-per cent rise in revenue to $3.6 billion, but the 8 per cent surge in parcel volumes could not mask the 10 per cent decline in addressed letter volumes.
Trading earnings before interest, tax, depreciation and amortisation (EBITDA) is up 1 per cent at $349 million. Profit after tax at $217 million is up 65 per cent, bolstered by property sales and other one-off benefits.
The group delivered strong inward growth from Asia, with inbound parcel volumes up 45 per cent in the period. Almost all of the growth came from China.
According to Australia Post, letter revenues were boosted by the same sex marriage postal survey. Without this survey, letter revenues would have experienced an even sharper decline.
The results demonstrate the compelling need and significant challenge for Australia Post to continue to transform, the group stated.
Christine Holgate, group CEO and managing director, said during the first half, the business made progress in driving further operational efficiencies, achieving a further $113 million in expense savings, which helped costs to grow marginally below revenues.
“Two-thirds of Australia Post revenues are now in competitive markets and although deliveries were strong and cost savings were encouraging, trading EBITDA was flat at just 1 per cent growth,” Holgate said.
Holgate said due to the strong seasonal nature of their business, Australia Post expects to again make a loss in the second half.
“We do forecast a full year profit before tax result in line with last year. Going forward, it is critically important we focus on returning Australia Post to sustainable growth,” she said.
“We are currently working to find new revenue streams for our post offices, as their role in communities becomes increasingly important to serve an ageing population and with traditional services closing branches,” she said.
The business continues to invest in infrastructure and customer experience while maintaining a healthy cash balance of $480 million with S&P reaffirming the strong credit rating of AA- during the last six months.
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