NZ Posts lifts first-half profit by 18 percent by slashing costs faster than sales fall
Feb. 24 (BusinessDesk) – New Zealand Post Group, which plans to eliminate up 2,000 jobs in the next three years and
reduce deliveries to just three days a week as volumes plunge, said first-half profit rose 18 percent as it slashed
costs faster than revenue declined.
Profit was $71 million in the six months ended Dec 31, from $60 million a year earlier, the state-owned postal service
said in statement. Sales fell to $860 million from $872 million, while operating costs dropped 4 percent to $761
million, or declines of $12 million and $32 million respectively.
NZ Post expects its full-year result to be “close to plan,” chief executive Brian Roche said. “We will balance ongoing
cost reduction with a strong focus on growing new and profitable revenue and developing new ways to serve customers and
meet their changing needs.”
The company is grappling with the continued slide in the volume of letters posted as consumers switch to the internet,
email and social media for everything from paying bills to sending birthday greetings and keeping in touch with loved
ones. It estimates letter volumes have tumbled 30 percent since 2006.
In the same period, parcel volumes have increased and today Roche said growing its parcels and logistics business “is a
NZ Post is preparing to reduce delivery of standard mail to urban households to alternate days in mid-2015 and is
trialling different modes of delivery over the next six months, it said. In November, the company said it aims to
eliminate between 1,500 and 2,000 jobs in a three-year shake-up, by reducing deliveries, closing Post Shops and trimming
“New Zealand Post will continue to reduce its property footprint, including owning fewer corporate Post Shops in its
network of 880 service points, with more services being hosted by local businesses,” Roche said.
The company will pay an interim dividend of $2.5 million, unchanged from a year earlier.