NZ Post profit sinks on writedowns in age of email

NZ Post profit falls 98% as significant write-downs add to already-tough year

By Jason Krupp

Aug. 20 (BusinessDesk) - New Zealand Post Group reported a 98% decline in annual net profit, as highly competitive markets, tight mail volumes and significant write-downs savaged the state-owned postal service’s earnings.

A net profit of $1.27 million was declared for the year to June 30, down from $78.1 million in the previous period, after the company was forced to realise $72.4 million in write downs related to “influences outside our control or to historical issues,” the company said in a statement.

The one-off costs included $19.8 million arising from changes to tax rules on depreciation, $17.4 million for the provisioning of its international mail business, $5.3 million in property and aircraft, and a $29.9 million reduction in the value of ParcelDirect Group, its courier joint venture with DHL in Australia.

Normalized net operating profit for the year fell 4.7% to 73.6 million, as the weaker economy, declining mail volumes and highly competitive market put pressure on contributions it banking, postal services and data management businesses.

Kiwibank Ltd., the company’s retail banking subsidiary, earlier posted a 13% decline in full-year profit. Interest income dropped 13% to $563.9 million, outpacing an 11% decline in interest expenses to $430.5 million, in a low-interest rate environment where lenders were forced to woo depositors to comply with pending prudential regulations.

NZ Post chairman Jim Bolger said the outlook for NZ Post is uncertain, as market conditions to continue to be challenging in the immediate future.

“We are actively addressing the impact of electronic communications on our traditional mail business and the inroads online transactions are making in other parts of our business, including the Retail network,” said Bolger. “We continue to closely manage costs and we are progressing the evaluation of options to ensure the future sustainability of our postal and retail networks in the digital world.”

The company declared a dividend for the year of $6.4, down 7.2% on the previous period.

(BusinessDesk)

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