New Zealand Post, the state-owned mail delivery service and trading bank owner, reported a 12 percent fall in annual profit as shrinking mail volumes were offset by gains in its Kiwibank and parcel businesses.
Net profit fell to $107 million in the 12 months ended June 30 from $121 million a year earlier, which was bolstered by the $72 million gain on the sale of its stake in Datacom, the Wellington-based company said in a statement. Revenue fell 1.6 percent to $1.66 billion, with domestic letter volumes shrinking 7 percent to 642 million and forecast to drop below 500 million in the next three years. Kiwibank lifted net profit 3 percent to $100 million on fatter interest margins and lower provisioning for bad debts.
"The changes we have made are starting to flow through in our financial performance and we expect further improvements from these changes over time," chief executive Brian Roche said. "However, the continuing decline of letter volumes here and overseas and a highly competitive environment for banking and parcels means we cannot afford to take our foot off the accelerator."
NZ Post is grappling with the continued slide in the volume of letters posted as consumers switch to the internet, email and social media for everything from paying bills to sending birthday greetings and keeping in touch with loved ones. It embarked on a major transformation programme last year, slashing its workforce and putting greater emphasis on growing its banking business.
Roche told a briefing in Wellington the mail service had clamped down on costs, reducing headcount by about 450 in the year, with the next big reduction to come in July 2015 when the frequency of delivery is reduced. Group expenditure fell 7.2 percent to $1.51 billion in the year.
