KEY POINTS:
New Zealand Post says the success of Kiwibank and other initiatives including a new Australian courier business will offset economic headwinds and declining letter volumes this year.
NZ Post yesterday delivered a $110.2 million June year net profit, 27 per cent up on last year's, which was restated under new accounting rules.
Chief executive John Allen said it was a strong result, particularly given some of the challenges in the period including rising fuel costs, which were up $5 million in the second half alone.
Chairman Jim Bolger said the group was very positive about its immediate future although "the New Zealand and world economies are clearly in difficult times".
However Bolger and Allen were confident the group's ongoing diversification into new operations and locations, which had served it well despite the softening in its core letters business, would continue to pay off.
Kiwibank, a crucial part of the diversification strategy, had been "a key enabler of our growth", said Allen.
This year Kiwibank posted a $36.8 million June year profit, a 19 per cent increase on the previous year and provided about a fifth of the group's $1.29 billion in revenue.
NZ Post's headline profit included a net $19.2 million of non-operational income such as a $24.8 million gain related to the establishment of its Express Couriers Australia joint venture partly offset by a net loss of $9.36 million on the revaluation of financial instruments, mainly Kiwibank's mortgage book.
The gain from the Australian joint venture was made as NZ Post sold a half share in two Australian courier businesses to joint venture partner DHL. The money was reinvested in buying a further three courier outfits.
The reinvestment of that gain, plus further support extended to Kiwibank to support its fast growth, meant NZ Post paid a lower dividend to the Government of $23.5 million against $30.8 million a year ago.
