New Zealand Post – profits fall by over 50%

New Zealand Post reported a massive decline in net profits to $13 million in the twelve months to thirtieth of June 2018. This is a fall in profits of $14 million as against the financial year 2017.

Core business excluding Kiwi Group Holdings reported a net loss of $39 million that results from ongoing and significant decline in letter volumes.

The chief executive of New Zealand Post David Walsh said that the expected decline in letter volumes has proved very challenging for this year’s results.

“New Zealand Post typically now delivers 1.2 million fewer letters every week which led to a significant financial impact, as we continued to operate a nationwide network for New Zealanders.

Total volumes of letters foul by 63 million by comparison to last year, amounting to a 12% volume decline and 11% revenue decline. However 7 million more parcels were delivered, Representing a 10% volume increase and a 7% revenue increase.

“Our business continues to make commercial decisions in response to the changes in the postal services market, and in doing so we are very conscious of those who rely on our letter services. As a State-Owned Enterprise we take our social responsibilities very seriously, balanced with the need to operate a sustainable business that provides value to all New Zealanders.

“If the current rate of letter decline continues, in four years’ time we can expect to be delivering half of the volumes that we do today. We are responding to the reduction in demand in a number of ways so this service can be maintained for communities and businesses alike.”

Regarding the increase in parcel volumes, Walsh said “Ecommerce is providing NZ Post significant opportunities and record volumes, as this year we delivered 77 million parcels for customers.”