Australia Post: revenues up 7%

Group revenue at Australia Post grew by 7% year on year to AU $7,499 million in financial year end 2020. Profits grew by $13 million to $53.6 million.

Letters business losses and network costs impacted the growth in profits, counterbalanced by a boom in e-commerce parcels. Parcel and services revenues grew by 15%, adding $729 million to the full year result.

Costs went up markedly compared to last year – up by $477 million thanks to increased operational network costs for the parcels business and personal protective equipment for workers.

The mail business saw $2 billion in revenues, down $220 million for the full year. The pandemic offset the stamp price increases, and as a result the segment saw losses grow by 26% to $241 million.

Australia Post Group Chief Executive Officer and Managing Director Christine Holgate said the result highlighted the critical need for temporary regulatory relief announced by the Federal Government in April this year, as the business quickly adapts to changes in consumer behaviour accelerated by COVID-19.

“We understand the important role our Posties and Post Offices play in serving Australia.  Protecting their roles, whilst meeting new community and business expectations, is critical as our business adapts to significant market changes. The Temporary Regulatory Relief provides us the opportunity to enable the Posties to deliver more parcels in turn helping sustain their roles and protect the viability of our Post Offices in a very challenging period,” Ms Holgate said.

“And while the growth in e-commerce has been a strong driver behind this year’s financial result, we have had to make changes to ensure our workforce and network can operate as efficiently and safely as possible. The pandemic has also severely impacted our ability to deliver across the country on time.  We had to make temporary changes, including new parcel pop-up facilities and chartering planes for air freight, to continue to serve the country during what has been a very uncertain year.

“Our Post Office network continued to play an essential role in providing goods and services to local communities. Through bushfires, floods and a pandemic, our Post Offices kept their doors open. Although traditional services such as letters, passports and Billpay fell in the period, due to travel restrictions and as businesses switched to digital communications, parcel revenues grew and have become their most important income source.  Over-the-counter parcel transactions have increased as people looked to send care packages and parcels to stay connected with loved ones through the COVID-19 crisis.

“The International business has been impacted by global conditions, due to a significant fall in air freight capacity to and from Australia, as well as many countries closing their borders in the second half of the financial year. Although international letters and packets volumes were down 16% year on year, the strong performance of AP Global, our cross-border eCommerce business, saw revenue grow by $146 million to $225 million, ensuring our total international portfolio remained strong.

“Domestically, our focus on investment in growing capacity in the parcels network has served us well, with the largest parcel processing facility in the Southern Hemisphere opening last October in Brisbane. This facility, along with 16 temporary smaller sites, has ensured we were able to support small and large businesses in connecting them with their customers, proudly contributing $2.4 billion in eCommerce economic activity in the fourth quarter.

“Of course, this result would not have been possible without the continued hard work and dedication of our people particularly our posties, delivery drivers, parcel and mail processors, contact centre and both corporate and licensed Post Offices teams. They continued to show up for work each and every day through uncertain times and worked hard to ensure the community had sustained access to essential goods and services.”