Australia Post revenues up 2% year-on-year but profit down 67% year-on-year

Australia Post

Australia Post has announced results for its FY2019. Group revenue was AU$*6,990m, up 2% year-on-year, and profit before tax totalled AU$41m, down 67% year-on-year (2018: AU$126m) as a result of significant letter losses.

Australia Post earned AU$4,774m in Parcels & Services, 68% of its total revenue.

The letters business now accounts for just 32% of total revenue at AU$2,216m, impacted by falling letter volumes. Losses from this business increased to AU$192m. Fixed costs to operate the letter business continue to rise although there has been no increase to the basic postage rate in over three years.

Domestic parcels grew 9.2%to AU$3,181m. The international parcel business grew 15.7% to AU$586m, underpinned by the consolidation of the global ecommerce business APG (formerly known as Aramex Global Solutions).

Financial Services and Identity Services generated over AU$500m revenue.  

“We saw record domestic and international parcel revenue as more and more customers are choosing Australia Post to deliver their ecommerce ambitions,” said Australia Post Group Chief Executive Officer and Managing Director Christine Holgate. “We also signed the Bank@Post community agreements, first with Commonwealth Bank, NAB and Westpac, and now more than 70 financial institutions have signed on. Customers will be able to continue to conduct essential banking transactions in 3,500 Post Offices across Australia using the Bank@Post service”, he added.

Other highlights for the financial year included:

  • investments of AU$424m in robotics and automation and 1,000 electric delivery vehicles purchased to support the growing ecommerce market
  • an agreement with important post office licensees – providing increased payments for parcels and financial services, in addition to upgraded technology
  • increasing use of alternate delivery options: more than 90m parcels were delivered via the Post Office network and use of 24/7 Parcel Lockers in 350 locations increased
  • full acquisition of AP Global, completed in December 2018 contributing AU$78m in additional revenue and giving Australia Post full control of its international commercial arm.
  • disposal of 10% stake in Aramex parent for AU$228m, reducing exposure to risk

Australia Post has forecast that Group revenue will grow in FY2020, adding that there will be continued pressure on profitability due to the ongoing impact of letter losses. “It is important letter pricing is addressed as without an increase to the basic postage rate, we will no longer be able to afford to fully subsidise the losses from the important post business, and urgent help is required”, said Holgate.

Source: Australia Post

*$:AU$F1.48/€:AU$1.64