NZ Post blames recession and competition for drop

State-owned New Zealand Post Group has recorded a 19.4 per cent fall in interim profit, which it attributes to the global economic downturn and increasing competition.

The net profit after tax of $42.5 million in the six months to December 31, 2009 was down from $52.8 million last year.

The Government will receive a $5.7 million interim dividend, down from $6.9 million last year.

The company cited supporting Kiwibank's continued growth, addressing declining mail volumes and improving the performance of its Australian courier joint venture, ParcelDirect Group, as issues for the future.

Revenue from operations fell 5.3 per cent to $621.5 million. Expenditure fell by $9.1 million to $589 million, due to cost control measures. Group profit before tax fell 21.1 per cent to $55.1 million.

Tight net interest margins and changing fee structures in an intensely competitive banking sector resulted in a reduction from $25.8 million to $24 million in the net profit of Kiwi Group Holdings, which includes Kiwibank.

The economic downturn accelerated an existing trend of declining letter volumes caused by electronic substitution and competition.

Domestic mail and parcel volumes handled by the postal services business during the half year were 5.7 per cent down on the corresponding previous half year.

NZ Post said there were signs of an economic recovery though it did not expect the benefits of it to be felt in the second half of the financial year.

- NZPA