NZ Post makes record profit
The future is not letterless, says David Walsh, NZ Post Tukurau Aotearoa chief executive, after announcing a record $102 million after-tax profit, up by $70m on the previous year.
‘‘It’s a less letters environment,’’ he said.
In the past 15 years, letter volumes have plunged from 1.5 billion a year, to just under 240 million, and while online shopping boosted the number of parcels NZ Post carried, letter volumes would continue to fall.
Walsh said letters would continue to be delivered because they remained important for some communities, and for processes including elections, and censuses.
Despite falling letter volumes, NZ Post was not seeking an agreement from the Government to allow it to deliver letters less frequently to homes and businesses, Walsh said.
Rural areas have deliveries five times a week, and urban areas three times a week – a deliberate strategy to keep rural areas connected.
‘‘The frequency is not something we are digging into too heavily,’’ Walsh said.
The price of postage on a standard letter rose in July from $1.50 to $1.70, and the cost for sending large and oversized letters went up to $3 and $4.30 respectively.
The profit for the year ended June 30 did not include proceeds from the $1.2 billion sale of Kiwibank to the Government, because that deal would settle in the coming months.
Negotiations had not begun with the Government about how much of its 53% share of the Kiwibank sale price would have to be paid to the Government as a dividend.
NZ Post is a state-owned enterprise owned by the Government.
Walsh said the record result was driven by an increase in earnings from NZ Post’s share in Kiwi Group Holdings, which owned Kiwibank, and growth in NZ Post’s parcel segment.
NZ Post’s wage bill has risen with 6% to 7% pay rises for experienced posties, and 16% to 18% for entry level positions.
‘‘We had to make sure we could attract the people we needed into our business,’’ Walsh said.
Parcel revenue in the year was $658m, up $137m on the previous year, with 93 million parcels delivered, an increase of 8 million on the previous year.
It delivered 238 million letters, which was a decrease of 36 million on the previous year.