INDEPENDENT NEWS

NZ Posts lifts 1H profit 18% by slashing costs

Published: Mon 24 Feb 2014 09:59 AM
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 top priority.”
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 costs.
“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.
(BusinessDesk)
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team led by former Bloomberg Asian top editor Jonathan Underhill and Qantas Award-winning journalist and commentator Pattrick Smellie provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

Refinery prepares to repair damaged pipeline
By: Refining NZ
Economy Grows 0.8% in June Quarter
By: Statistics New Zealand
Annual Net Migration Remains High
By: Statistics New Zealand
Cassini's grand Saturn finale - Expert Reaction
By: Science Media Centre
Court rejects Cathay unit's retirement age of 55 for pilots
By: BusinessDesk
Judgment: AFFCO NZ Limited v NZ Meat Workers Union
By: NZ Supreme Court
Air NZ restricts ticket sales as Auck fuel shortage bite
By: BusinessDesk
MARKET CLOSE: NZ shares up, milk stocks Synlait, A2 gain
By: BusinessDesk
MBIE: Wiri terminal wouldn't have avoided pipeline woes
By: BusinessDesk
UPDATE: NZ Refining, Air NZ shares fall
By: BusinessDesk
NZ Refining says pipeline leak to hit revenue by up to $15m
By: BusinessDesk
Update on Marsden Point pipeline disruption
By: New Zealand Government
Update on Marsden Point pipeline disruption
By: New Zealand Government
Update on Marsden Point pipeline disruption
By: New Zealand Government
Update on Marsden Point pipeline disruption
By: New Zealand Government
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media