‘Significant’ decline in NZ Post letter volumes

The core postal business of stateowned New Zealand Post is back in the red, with a further plunge in letter volumes.

NZ Post reported a net profit after tax of $13 million for the year ended on June 30, down from a $27m profit last year.

However, the performance of it majority stake in Kiwibank flattered a declining result in the postal business.

NZ Post’s nationwide postal service reported a $39m loss, which resulted from ‘‘ongoing and significant letter volume decline’’.

Compared with the 2017 financial year, letter volumes dropped by 63 million, or 1.2 million a week.

NZ Post chief executive David Walsh said the fall in letter volumes was expected but had ‘‘a significant financial impact’’. He pointed to difficult decisions ahead.

‘‘Our business continues to make commercial decisions in response to the changes in the postal services market, and in doing so we are very conscious of those who rely on our letter services,’’ Walsh said.

‘‘As a state-owned enterprise we take our social responsibilities very seriously, balanced with the need to operate a sustainable business that provides value to all New Zealanders. If the current rate of letter decline continues, in four years time we can expect to be delivering half of the volumes that we do today.

‘‘We are responding to the reduction in demand in a number of ways so this service can be maintained for communities and businesses alike.’’

The drop in letters was partially offset by an increase in parcels, which rose by 7 million.

However, the cost of sending the parcels was high, with NZ Post’s expenditure climbing 5 per cent to $930m while revenue dropped 2 per cent to $877m.

NZ Post said its investment in Kiwibank’s owner, Kiwi Group Holdings, contributed $52m to NZ Post’s net profit, down from $71m a year earlier.

This decline related to the sale to ACC and NZ Post of a minority stake, the company said.