Strong Half Year Result For New Zealand Post
New Zealand Post today announced an unaudited net profit after tax of $22.4 million for the half year to 31 December 2000 compared with $21.1 million last year.
New Zealand Post Chairman Ross Armstrong said the result was ahead of expectations and reaffirmed the company’s focus on creating value through its growth strategies.
"This is a very good result and is a complete turnaround from a deficit of $3.8 million for the transitional quarter to June 2000," Mr Armstrong said.
Chief Executive Elmar Toime said the improved profit reflected the company’s focus on efficiency in an environment of lower mail volumes, and the ongoing pursuit of global business opportunities.
Operating revenue of $520.1 million was up 8% on the same period last year (1999: $482.0 million) but was behind expectations. Revenue growth came mainly from business activities outside New Zealand.
This included the acquisition in July 2000 of Australian courier company Couriers Please and continued growth from New Zealand Post’s international subsidiary, Transend (formerly New Zealand Post International Limited), through its offshore consultancy work and increased sales of postal sorting equipment in Europe.
Operating expenses increased by 7.3% to $475.7 million (1999: $443.3 million), an improvement on budget targets. The increase largely reflected expenses associated with the international consultancy business and the acquisition of Couriers Please. Expenditure related to core domestic activities was contained through a cost management programme targeted at all areas of the business.
Total letter volumes for the half year to 31 December 2000 declined 3.3% on the same period for the previous year. This fall was greater than anticipated and was due to slower economic conditions, electronic substitution and increased competitor activity.
"We expect letter volumes to continue to decline and have made significant changes to our operational network so that we can continue to manage our costs tightly," said Mr Toime.
"The half year result also includes the expenses of preparing the banking business case. Following Shareholder approval, we are now working on the establishment of low-fee personal banking services throughout the retail network by early 2002."
Mr Toime said the focus for the following year would be to build value through growth strategies in both the international and electronic business markets.
We will also maintain our commitment to providing an efficient traditional mail service to all New Zealanders,” he said.
Mr Toime said New Zealand Post was on track to meet its targets for the year ending 30 June 2001.
"However, the next six months will be challenging for us as we manage our resources in a rapidly changing environment, both at home and around the world."
YEAR IN REVIEW
HALF YEAR ENDED 31 DECEMBER 2000
* Tax paid profit of $22.4 million, compared with $21.1 million for the same period in 1999.
* Revenue was $520.1 million, an 8% increase on the same period in 1999.
* Revenue growth was mainly from international business activities, including consultancy work and sales of postal sorting equipment.
* Australian courier business Couriers Please acquired in July 2000.
* Total letter volumes declined 3.3% on the same period in 1999, reflecting the slower economy, electronic substitution and increased competition.
* Successful programme of cost management implemented.
performance Three months ended 30 June 2000 Six months ended
31 December 2000 Six months ended 31 December
Operating revenue $219.2m $520.1m $482.0m
Operating expenditure $220.4m $475.7m $443.3m
Net earnings $(3.8)m $22.4m $21.1m
Issued and paid-up Capital
Shareholders’ funds $197.2m $219.6m $207.8m