NZ Post turns in $72m profit

NZ Post acting chief executive Sam Knowles. Photo / Mark Mitchell.

New Zealand Post has delivered a net profit of $71.8 million in a year of mixed results.

While Kiwibank continued to thrive parts of the groups such as Postal Services, Datamail and the courier joint ventures had been affected by the economic downturn, chairman Jim Bolger said.

Announcing the financial results for the year ended 30 June 2009, Bolger said the profit compared with the $110.2m net profit for the 2007/08 financial year.

However, the two results were not directly comparable because of the difficult economic situation during 2008/09 and one-off gains in 2007/08, he said.

"While the New Zealand Post Group has not been able to achieve its financial performance targets, taking into account the most difficult trading conditions we have seen in six decades, the Group overall has performed reasonably well," he said.

Normalised earnings, after adjusting for various one-off items, amounted to $77.2m 2008/09, a 16 per cent decline on a normalised 2007/08 result of $91.9m.

The adjustments include restructuring costs, mainly within Postal Services, of $11.0m compared to $3.8m last year, a $5.2m adjustment for proceeds from the partial sale of the Australian courier business associated with the creation of the new Australian courier joint venture with DHL, compared to $24.8m last year, and various accounting adjustments of $4.2m compared to $5.5m last year.

The current result reflected lower revenues due to declining economic activity, as well as substantial costs incurred in the challenging economic environment, Bolger said.

These included higher bad debt provisioning for Kiwibank of $12.2m, compared with $2.9m in the previous financial year.

Bolger said dividends of $6.9m were payable, compared with $23.5m in the previous year, and that continuing economic uncertainty would have an impact on the Group's performance.

New Zealand Post Group was well placed deliver positive results, though in the short term, a lower level of profitability was likely compared to previous years.

The offer during the year of $150 million of unsecured, subordinated interest-bearing Notes, which were oversubscribed to $200m, showed the strength of the New Zealand Post Group brand, he said.

Acting group chief executive Sam Knowles said Kiwibank had continued its high levels of growth. It was well positioned for future growth and had increased staffing level to service its expanding customer base.

Kiwibank now forms part of Kiwi Group Holdings, a new holding company, which delivered a net profit of $51.0m in the 2008/09 financial year.

Over the 2008/09 year, the Postal Services Group experienced a 6.7 per cent decline in total addressed mail volumes -- or more than 65 million items.

Earnings contribution from the Postal Services business, declined from $67.3m in 2007/08 to $25.4m.

- NZPA