NZ Post delivers Government $50m

New Zealand Post has handed the Government a $50 million dividend after unveiling a record $137.2 million full-year profit yesterday.

The result - the strongest in the state-owned postal service provider's history - was boosted by a one-off $78.6 million gain on the sale of its Express Couriers business into a joint venture with Deutsche Post-owned DHL last year.

Part of the Government's dividend included $23 million from the sale.

Excluding that, its net profit was $58.6 million. That was still up $22.1 million or 60.5 per cent on last year.

Chief executive John Allen said the result was also boosted by the performance of its core Postal Services Group and the maiden profit of its Kiwibank subsidiary this week.

Chairman and former Prime Minister Jim Bolger said the corporation was one of the best performers of any postal service around the world and its results were all the more remarkable as its core service, traditional letters, were a declining business.

Pressure from email and text messaging had seen letter volumes decline by up to 2 per cent in recent years.

Despite this, it had been a good year for the Postal Services Group, with overall mail volumes up 1.4 per cent thanks to greater use of direct mail and bulk business mailing. Domestic parcel volumes - boosted by the activities of online auction house Trade Me - rose 7.4 per cent.

Standard rate mail continued to decline.

NZ Post had paid the Government almost $1 billion in dividends since its conversion to a State-Owned Enterprise in 1987, said Bolger.

Asked if he would favour the company's privatisation, he said it was a decision for its owners to make. There had not been a "skerrick of suggestion" of that happening during the election, he said.

The establishment of the Express Couriers joint venture had allowed NZ Post to create a more integrated service by combining DHL's international network and service with New Zealand's local network.

NZ Post was trying to get New Zealanders to use postcodes to improve efficiency.

Allen said NZ Post's financial position was strong, with equity rising to $483 million, from $350 million a year earlier. There would be no need to call on the Government to increase Kiwibank's equity as the bank grew, he said.

Kiwibank now accounted for the lion's share of NZ Post's balance sheet and it would play an increasingly important role within the corporation.

"A great deal of our future is tied up in the continued growth of Kiwibank." he said.

This week Kiwibank reported a maiden full-year profit of $7.2 million - a sharp turnaround on the $500,000 loss recorded a year ago.

Customer numbers, growing by 400 people a day, had increased to 354,000 over the year, with customer deposits reaching $1.42 billion and home loans and advances reaching $1.57 billion.

While NZ Post was unlikely to repeat this year's net profit due to the one-off gain, Allen said the underlying profitability of the corporation would continue to grow.
- additional reporting NZPA