Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ Post improves half year result but big challenges remain


25 February 2013

New Zealand Post Group improves half year result but big challenges remain

The New Zealand Post Group has posted an overall improved result for the half year ended 31 December 2012 but with mixed results across its financial services, and its logistics and mail businesses.

The Group recorded a net profit after tax of $59.6 million, compared with $35.4 million in the corresponding period in 2011.

The Directors have declared an interim dividend of $2.5 million for the period, the same as for the first half of the previous financial year.

New Zealand Post Group Chief Executive Brian Roche said the result was boosted by the performance of Kiwibank and the Group’s financial services businesses.

Mr Roche said Kiwibank’s first half performance builds on its market position. The bank performed well in a highly competitive market, particularly in the face of aggressive competition in the home loan environment.

There were mixed results across the logistics and mail businesses. The result reflects the benefits of the full consolidation of the courier business – Express Couriers Limited (ECL) – following the acquisition of the remaining 50 percent of the business in June 2012. However that was balanced against a continued decline in letter volumes and revenue.

Mr Roche said ECL’s performance was very encouraging in the extremely competitive courier market.

“ECL has performed well to increase profitability compared with the previous year. The result supports our decision to purchase the remaining shares in this company so as to have 100 percent ownership of a business providing express delivery services.

However challenges remain for the mail business with total mail volumes falling by 35 million compared with the corresponding period the previous year – a drop of 8.1 percent. Tight cost management helped offset the declines in revenue.

“Thirty five million fewer pieces of mail in the network is a stark reminder of the need for change. New Zealand Post Group is confident it can maintain a viable and sustainable physical network if it is given the flexibility to make necessary changes in the future.

“Making those changes can still be achieved in a measured and planned manner working in the best interests of the community and business. But the latest mail volume statistics are further evidence that the ability to make the right decisions needs to be given now rather than put off,” Mr Roche said.

The New Zealand Post Group full year financial outlook is to meet expectations. Despite an increasingly competitive residential banking sector, Kiwibank has maintained strong levels of profitability, although further pressure is expected towards year end. The mail business continues to manage the decline in letter volumes with operational changes to ensure the business remains viable while longer term initiatives are implemented. ECL continues to trade strongly.

Other key decisions made in the first half of this financial year include the divestment of the shareholding in Datacom, which will result in a one-off gain on sale, and the sale of two office buildings in Auckland and Wellington, all of which will free up capital for both the bank and continuing change in the logistics and mail businesses.

“The Group remains committed to and confident of achieving the strategic goals of growing the bank and delivering a sustainable network for the future”, said Mr Roche. $ millions 6 months ended 31 December 2012
(unaudited) 6 months ended 31 December 2011 (unaudited) 12 months ended 30 June 2012 (audited)
Revenue from operations 872.3 670.2 1,309.4
Operating expenditure 793.1 628.5 1,223.5
Profit before income tax 78.4 43.9 190.1
Net profit after tax 59.6 35.4 169.7
Share capital 192.2 192.2 192.2
Shareholders’ equity 1,019.2 833.0 959.5


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news