Parcels strong, mail struggling: NZ Post

AUCKLAND: New Zealand Post said its halfyear profit more than quadrupled but its mail service is still floundering and puts it in ‘‘a difficult position’’.

The stateowned enterprise reported a net profit of $31 million in the six months to December 31 versus $7 million in the prior year. The lift was due in part to a recordbreaking Christmas delivery season for parcels, it said.

Revenue was up $20 million at $491 million compared with the prior period and an average 218,000 parcels were delivered a day for a sixmonth period.

Chief executive David Walsh noted that the second half of the financial year was typically softer and ‘‘this year comes against a backdrop of uncertain global trading conditions’’.

While ‘‘there’s no doubt that growth in profit generated from parcel delivery is good news, NZ Post continues to manage the challenge of a declining number of letters being sent,’’ he said.

Letter revenue was down $5 million, and Kiwis sent 23.1 million fewer letters, a decline of 11% on the year, at 176.6 million. Ten years ago, New Zealanders were sending 1 billion letters a year.

NZ Post reiterated a commitment to providing a physical mail service but said it must be financially sustainable on its own.

The mail service operator has been reorganising itself for most of the past decade to cope with the slump in letter volumes. That has meant changes in delivery schedules, shrinking its processing centres, cutting jobs, and dropping standalone post stores.

‘‘The service we delivered for the Local Government Elections in 2019 boosted the number of letters sent, however, we must face the reality that New Zealanders are relying less on letters to communicate. This puts NZ Post in a difficult position,’’ Mr Walsh said.

NZ Post would continue ‘‘to juggle the opportunity of a growing parcels business and planning for further growth, with the challenge of fewer letters’’.

Rival Freightways, which operates couriers and the DX Mail service, is due to report next week. It also has previously signalled a steep decline in letter volumes.