NZ Post June year net profit rises 35 per cent to $36.5m

12.00pm

New Zealand Post today reported a rise in its June year net profit of 35 per cent to $36.5 million.

It was the largest profit increase in a decade for the state owned postal service, which has been grappling with the problem of email supplanting traditional mail.

Chief executive John Allen said the turnaround of the express courier business and a strong performance from the international mail business and Kiwibank contributed to the positive result.

"As we continue to face the challenge of overall declining mail volumes, we have seen that customer needs are changing," he said.

"While mail is still the engine room that drives the New Zealand Post Group, people are using it in different ways."

Despite a 2.3 per cent fall in items delivered this year, NZ Post had seen growth in some areas of its operation.

Domestic parcel volumes grew by 8.2 per cent, while the number of airmail packets and parcels sent out of New Zealand rose more than 10 per cent.

NZ Post's urgent courier firm Pace! recorded 12 per cent growth in volumes.

At December 2003 direct mail volumes had grown by 13 per cent on the previous same period.

"During the year we also began talks with DHL about a joint venture opportunity. These discussions are moving forward positively," Mr Allen said in a statement.

Mr Allen said Kiwibank, a fully-owned subsidiary of NZ Post, had also performed solidly.

Kiwibank's customer base grew 72 per cent to 253,000, while the bank's financial performance was almost a year ahead of target.

The State-owned Enterprise's revenue was $1.05 billion, up $74.4m on last year. Operating expenses rose $63.7m to $986.4m.

A total dividend payment of $21.9m was made by NZ Post, against $16.2m last year.

NZ Post chairman Jim Bolger said the underlying strength of the company positioned NZ Post well for further investment in Kiwibank and in infrastructure.

"The extraordinary success of Kiwibank is an example of sensible business decisions made to grow the assets of the New Zealand Post Group," Mr Bolger said.

"We continue to invest and grow Kiwibank and are well advanced with plans for small business banking and the introduction of Kiwibank ATMs."

Meanwhile, NZ Post said it recorded a record profit from its stamps business, thanks to the successful Lord of the Rings issue.

It had also acquired 75 per cent shareholding of Outsource Solutions Australia Pty Ltd and the launch of MediaScene, which was an independent survey of New Zealand advertisers and agencies.

Mr Allen said NZ Post delivered 96.8 per cent of mail on time in the June year, which placed it among the world's best providers.

"While this is a pleasing result, we will continue to strive towards an on time delivery of mail of 100 per cent," Mr Allen said.

During the year, the price of mailing a standard letter increased 5c to 45c to offset rising costs for providing mail services.

Mr Allen said NZ Post, which employs about 17,500 people, was changing its operational direction to focus on customers.

"This is critical for the growth of the group and will remain at the cornerstone of everything we strive for," he said.

- NZPA