Trailer Magazine

AusPost secures strong revenue growth despite letter losses

  • Posted on Monday 24th, February 2020.

Australia Post’s parcel and services revenue growth was up almost $300 million or 13 per cent on the same period last year to $2.698 million, underpinned by strong growth in parcels, financial and international services.

Community Post Office revenue grew four per cent reflecting stronger performances in both corporate and licensed stores.

This is reported to be the highest revenue growth in over a decade for these services without a major acquisition. The profits from these businesses grew to $193 million, up 12 per cent.  All these business lines, according to Australia Post, operate in highly competitive markets and they now account for over 70 per cent of group revenue.

Letter revenue was down 9.0 per cent and letter losses rose a further $46 million or 112 per cent to a total loss of $87 million for this half. Although Australia Post secured $129 million in efficiencies in the period and has benefitted from strong growth in other areas, this still has not fully compensated for the increasing costs supporting this important community service.

“Our strategy to diversify our business and focus on our customers is working well, evidenced by our record underlying performance," said Group Chief Executive Officer and Managing Director, Christine Holgate.

“However, the costs to operate the letter business continue to rise, as our people are still required to deliver to every home or business every day, process and collect the mail, whilst letter volumes and revenues fall. The 10 cent letter increase in January will support our letters business going forward, but after four years of no increases, it alone will not fully compensate for the losses.

“Australia Post and the services we provide are highly regarded in the community, particularly in rural and regional Australia, where often we are the last remaining service provider with a physical presence.  In order to ensure we are able to continue to provide these community services and remain sustainable, the time has come we must transform our delivery network," she said.

Australia Post delivered more than 50 million parcels in December, according to Holgate, with over 3.1 million on the company's busiest day. More than 190 million letters were delivered, 4,600 staff hired across the company's national network, while complaints via customer service teams for this period decreased by 14 per cent.

“Ahead of Christmas we also opened the largest parcel processing facility in the Southern Hemisphere in Brisbane and invested in new automation capabilities across a number of our large processing facilities to continue to service our customers," said Holgate.

“During this period of exceptional growth, our entire workforce worked through unprecedented weather conditions across the country with drought and an early start to our bushfire season in November, and we still met all of our service obligations for letters and parcels. The mail continued to make it through to our customers. I am incredibly proud of the critical role our people played in these local communities assisting those in their time of need.

“Although we were lucky to not lose any facilities or Post Offices during the bushfire crisis, many of our employees lost homes and property and faced extreme stress as they were evacuated for their safety. Our Post Offices and posties were able to play an essential role supporting impacted communities including with access to critical funds through our Bank@Post services, providing free mail redirection, mail hold services and accepting over the counter donations for Red Cross Disaster Relief Fund, which has raised over $1.4 million to date," she said.

Last year the first half result included a one-off $37 million benefit from the Aramex and AGS transactions in the period. Consistent with previous years, Australia Post expects the second half to again be quieter.

Australia Post will release its full year results in August.

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