NZ Post slashes first-half dividend by two-thirds

NZ Post slashes first-half dividend by two-thirds as profit halves

By Paul McBeth

Feb. 25 (BusinessDesk) – New Zealand Post Group, the state-owned postal service, slashed its first-half dividend to the government by two-thirds as its reported profit more than halved.

NZ Post will pay just $1.8 million to the government for the six months ended Dec. 31, down from $5.7 million a year earlier, as net profit tumbled 63% to $15.8 million in the period. Rising impairment charges for bad debts weighed on the earnings, with subsidiary Kiwibank Ltd. yesterday reporting a 41% fall in profit, while the postal delivery service continues to languish, with earnings sinking 52% to $9 million. The group doesn’t expect to meet its full-year target profit of $60.8 million.

“The framework for the long-term future of the New Zealand Post Group has been put in place, and I expect the benefits of our strategy, which includes our commitment to growing Kiwibank into new levels of banking service, to accrue progressively over time,” said chief executive Brian Roche in a statement.

“Our efforts are being directed through a revised structure comprising three new divisions – customer solutions and services, innovation and technology, and operations – in addition to the existing Kiwibank and joint venture courier businesses,” he said.

NZ Post has struggled to compete in an increasingly electronic world, writing down more than $72 million in the last financial year. Still, the postal services are the entity’s major source of revenue, and contributed more than half of the $652 million in the period, and beating expectations. Domestic mail volumes fell 3.6% in the period, though this was offset by an increase in postal charges.

Roche said the group increased spending by $49.8 million in the period, which mainly came from Kiwibank’s bad debt provisioning and a $13 million writedown in fair value gains at the bank. NZ Post also took a $5.7 million loss on the sale of an Air Post aircraft, though that’s expected to be recouped over time without the servicing costs.

(BusinessDesk)

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