Strong ecommerce sales have helped boost Australia Post’s profit by 41 per cent to $134 million, as the national carrier transforms its business to focus on parcel delivery.
Australia Post today announced a full-year profit after tax of $134 million, up 41 per cent on FY17.
Parcel revenue was $3.5 billion and volumes rose 11 per cent. That growth, alongside a range of cost cutting across operational and support functions, helped offset a 10 per cent decline in letter volumes.
Letters still contributed $2.4 billion to AusPost’s $6.88 billion full year revenue, which was up 1 per cent year-on-year.
“While this result was pleasing it demonstrates the business has a significant challenge ahead as it continues to transform. Although we continue to optimise our delivery network, we require $2 of parcel revenue to mitigate the impact of every $1 decline in letters,” Australia Post’s Group CEO and Managing Director Christine Holgate said.
Digital is also putting pressure on Australia Post’s real estate assets.
“In parallel with letter volume decline, many of us are paying our bills online and large organisations are withdrawing from regional towns. This puts further pressure on our local post offices to serve these communities with important services, including financial transactions. These growing services require investment and increased funding to ensure we can meet communities’ needs,” Holgate said.
Looking ahead, AusPost has forecast there will be greater pressure on profitability in the FY19 due to the continued decline in letters and caution around domestic and cross-border retail conditions.
AusPost plans to spend $500 million in FY19 across its parcel processing and delivery facilities, on top of a $300 million investment in FY18.
“As Australia’s most trusted delivery partner, facilitating 82 per cent of the nation’s ecommerce, we are uniquely placed to take advantage of a number of growth opportunities,” Holgate said.
“This includes serving our business and government customers better, rejuvenating the role of the post office in the community, focussing on the significant international opportunities, and creating and simplifying our products that people value and trust.”