NZ Post Group Earnings Stable In Tough Times

12 March 2009
 
NZ Post Group Earnings Stable In Tough Times

Business diversification strategies have helped the New Zealand Post Group achieve a net profit of $52.8 million in a challenging half year ended 31 December 2008.  The earnings are stable compared with the $52.9 million reported for the corresponding previous half year.

Group Chief Executive John Allen said current economic conditions affected different parts of the business in different ways.  While Kiwibank continued its remarkable growth path, other parts of the Group, particularly traditional postal services, experienced a business slowdown.

“The half year result demonstrates the ongoing benefits of the diversification strategy commenced over 20 years ago to expand into customer and personal communications, goods distribution and logistics, electronic data management and banking and payment services,” said Mr Allen.

He said that, apart from the global economic downturn, the financial result also reflected higher costs, especially in delivery operations and to support Kiwibank growth.

The Group profit before tax was $69.9 million, a 6.7 per cent decline from $74.9 million, with revenue from operations amounting to $656.2 million, and expenses totalling $598.1 million.

The Board of Directors has declared an interim dividend of $6.9 million for the six months ended 31 December 2008, to be paid on 16 March 2009.  This compares with an interim dividend of $16.9 million for the corresponding previous half year.

“We have reduced the level of dividend to enable reinvestment of funds into our business,” said Mr Allen.

icular highlights for the period included the continued strong performance of Kiwibank, which contributed $25.8 million towards the total net profit of the Group, and the success of the Group’s Electoral Enrolment Centre, which delivered record enrolment levels for the general election in November.

Mr Allen expects the low-growth economic environment to continue for the foreseeable future.

“Companies worldwide are feeling the financial pressures of the economic downturn and postal organisations universally are no different.  The second half of this financial year will be challenging and we are ensuring our businesses are responding appropriately to the current financial conditions.

“I’m optimistic that with prudent cost management and a focus on delivering efficient services to customers across all of our businesses we can remain well-positioned to achieve growth in the medium term.”

He said the Group will maintain a strong focus on its corporate responsibility initiatives, which were recognised during the half year with an EEO Trust Work and Life Award, and the Top 200 Ethical Governance Award.

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