Core business profit fall at New Zealand Post

New Zealand Post saw a net profit of $6 million for the six months to 31 December 2017. However, the postal operator added that it is still getting to grips with the “ongoing and accelerating letter decline challenges”.

Excluding Kiwi Group Holdings, New Zealand Post ’s core business saw a net loss of $13 million, which it said can be “largely attributed to a marked acceleration in letter volume decline”.

The profit making Kiwi Group contributed $19 million to the postal operator’s net profit for the six months in question. This compares to $54 million in the first half of the previous year. The decline is down to the same of 47% of Kiwi Group on the 31st October 2016.

According to New Zealand Post CEO David Walsh, responding to the decline while maintaining its service obligations has resulted in a “very financially challenging six months”.

“Our largest sending customers are increasingly moving to online communication for their own customers, as this is now what many of us expect in a digitised world,” said Walsh.

“This is a significant challenge for New Zealand Post, and cannot be underestimated in terms of loss of revenue as we seek financial sustainability for this valued service.

“We did however see an increase in parcel volumes, up 9.9% on the same period the year before, with over 39 million delivered. During the Christmas period, on our busiest day we processed over 330,000 parcels, an increase of 15% from the previous seasonal record.

“The growth in parcels is evidence that our e-commerce strategy is the right one.”

Walsh said that the focus for the second half of FY 2018 will be the “ongoing need to make the letters business financially sustainable, maximising the opportunities from continued growth in parcels, and furthering plans for e-commerce partnerships”.