Aussie service takes Toll on Japan Post

JAPAN Post is believed to have tumbled into the red after writing billions of dollars off the value of Toll Holdings as it pays heavily for taking on Australia Post on its home turf.

The Japanese postal service was expected last night to reveal

¥400 it was taking a billion ($4.8 billion) impairment on Toll less than two years after buying the Australian logistics heavyweight. According to frenzied speculation in the Japanese press, the postal service was poised to declare the hit had wiped out its earnings for the year to March, dragging it into the red. It was tipped to announce a

¥40 net loss of billion – its first loss since privatisation a decade ago.

Japan Post had earlier forecast

¥320 a net profit of billion for the year to March.

Chief executive Masatsugu Nagato was expected to reveal the group was writing off all the goodwill on its books for Toll. The Japanese group paid $6.5 billion for the Melbournebased freight company in May 2015.

The impairment comes at a time of fierce competition in the Australian parcel industry.

Australia Post tipped $2 billion into its package-handling facilities two years ago as part of an attempt to stave off an assault from offshore players.

While Toll has floundered, Australia Post in February announced a net profit for the six months to December of $197 million – up from a slender $1 million a year earlier.