NZ Post shrugs off Kiwibank costs

By KEVIN TAYLOR

Kiwibank has shaved earnings off NZ Post's result, but the postal giant still managed a 4.2 per cent net profit rise in the year to June.

NZ Post yesterday announced a net profit of $21.9 million for the year, up from $21 million the previous year.

The state-owned enterprise said it had no plan to raise the price of standard post from 40c, where it has been since 1987 except for a three-year period.

Kiwibank chairman Jim Bolger said the result was pleasing, particularly because of the development costs associated with Kiwibank.

He said the bank was a major success story which had returned banking overnight to communities that had been resigned to the erosion of essential services.

The bank has 259 branches - more than any other bank - and yesterday had 63,045 customers.

NZ Post operating revenue was up 1.2 per cent, from $954.7 million to $966.4 million.

Operating expenses rose 2 per cent, from $913.2 million to $931.4 million, mainly as a result of spending on Kiwibank.

Ebit (earnings before interest and tax) at $46 million was down $9.7 million on last year, mainly because of Kiwibank.

Without the bank, NZ Post's ebit would have increased by 7.7 per cent.

NZ Post chief executive Elmar Toime said NZ Post's domestic mail volumes had increased, defying a worldwide trend of decline.

Domestic letter volumes rose 0.8 per cent because of good economic conditions and the 2001 local government and 2002 general elections.

On May 3, NZ Post processed 6.9 million items, the highest volume recorded on a single day.

The big mail-day included election enrolment mailouts, and beat the previous record of 6.7 million items processed on a free post day held in July 1996.

Toime said Kiwibank made a loss of $10.2 million - which was announced on September 13 - but it had been expected and was about $1 million better than budget.

It would make a loss in the new financial year as well, but would start to come out of loss-making in the following year.

He said that more people were visiting postshops since Kiwibank opened in February.

Toime said NZ Post was determined to increase mail volumes.

"By no means have we written off mail as a communications medium for business. We think there are opportunities for growth there."

He said the establishment of Kiwibank had not distracted NZ Post from its other operations.

"We have shown we can handle a major business diversification and keep the rest of the business going."

NZ Post was on target for an improved bottom line result.

Its paid-up capital rose during the year from $120 million to $192.2 million, boosted by the money the Government gave for Kiwibank.

An interim dividend payment of $9.6 million was made to the shareholder - the Government.

A final dividend of $3.5 million will be paid on September 30.

That makes the total dividend for the year $13.1 million, up from $7.4 million the year before.