The Christchurch earthquake will wipe $35 million to $40 million off the New Zealand Post group's profit, reflecting increased provisioning for bad debts at Kiwibank, reconstruction costs, and reduced economic activity in the country's second-biggest city.

Those write-downs are the main factors in NZ Post warning today it will report a profit well below its published target of $60.8 million for the year to June 30.

The state-owned postal, courier, parcel and online communications delivery service also anticipates a further writedown on the value of its joint venture with DHL Australia in the under-performing Parcel Direct group.

The Parcel Direct businesses are for sale after both owners lost faith in a turnaround strategy, and NZ Post wrote off $29.9 million on its investment last year, with more potentially to come once a sale is finalised, NZ Post's chief financial officer, Mark Yeoman said.

In a 2008 statement, NZ Post put the total value of investment by both parties in the joint venture at A$140 million.

Chief executive Brian Roche said the headline result did not reflect the underlying strength of NZ Post's core activities, which were "performing on target, as a result of tight cost management."

"However, continued flat economic conditions, combined with impacts arising from the Canterbury earthquake and a series of one-off costs will impact significantly on the end year result," Roche said in a statement.

A further one-off cost to hit this year's result relates to an internal restructuring, costs for which had yet to be finalised, said Yeoman.

Flatter economic conditions were likely to see the carrying value of some assets written down as well.

However, "the issues are not expected to have a material effect on the group's commercial value or its ability to meet its dividend and debt obligations," Roche said.

Its cash position remained strong and its Standard & Poor's credit rating continues unchanged at AA- (stable).

The business is preparing an action plan "to ensure a sustainable mail processing and delivery network for the future" for presentation to the board in the next financial year," said Roche.