New Zealand Post Announces Half Year Result

New Zealand Post today announced an unaudited net profit after tax of $11.7 million for the half year to 30 September 1999.

New Zealand Post Chief Executive Elmar Toime said the result was in line with expectations.

“Lower mail volumes, the acquisition of Ansett Express and continued investment in new initiatives contributed to the lower after tax result over the same period last year (1998: $14.4 million),” Mr Toime said.

Operating revenue was up 11.8% to $432.6 million (1998: $387.1 million). Increased revenue from international consultancy, newly acquired business Ansett Express and the Electoral Enrolment Centre’s management of the 1999 general election enrolment campaign contributed to the growth in operating income over this period.

Expenditure increased 14.0% to $408.8 million (1998: $358.6 million) and was largely the result of ongoing development of the company’s electronic commerce business and costs associated with tendering for the South African Post Office contract. The purchase of Ansett Express and investment in information technology, particularly in preparation for the Year 2000, also contributed to higher costs.

Total mail volumes increased by 6.1%, however letter mail volumes fell by a disappointing 0.5%. Mr Toime said the increase in total mail volumes was driven mainly by strong growth in unaddressed advertising mail, while the fall in letter mail volumes reflected the slower economy, the effect of electronic substitution and increased competition from deregulation.

Mr Toime said parcel and courier volumes grew strongly at 11.3% over the same period last year.

“The company has continued to be successful in winning new customers in this area. Use of the latest freight management and information technology for services such as courier pick ups and deliveries, and track and trace has proved popular with our customers.”

Mr Toime said the second half year results were expected to reflect similar economic conditions.

“We expect electronic substitution to increase for certain types of mail and at the same time we are building our expertise and the range of services we offer in the electronic business market.

“We also anticipate continued growth in the use of mail by businesses to communicate with their customers. As a result, we will continue our efforts to promote the use of letter mail for well targeted direct marketing.”

YEAR IN REVIEW

HALF YEAR ENDED 30 SEPTEMBER 1999

 After tax surplus of $11.7 million, in line with expectations but down 18.8% for the same period last year.

 New Zealand Post revenue was $432.6 million, up 11.8% over the same period last year.

 Letter mail volumes were down 0.5% on the same period last year, mainly reflecting the slow economy.

 New Zealand Post International Limited won a three-year contract to manage the South African Post Office.

 Ansett Express courier business acquired from Air New Zealand Limited and Ansett Holdings Limited.

 Internet bill payment service successfully trialled with further plans to launch the service later in the year.

 New Zealand Post and Blue Star opened nine new Books & More: New Zealand Post stores, taking New Zealand Post’s total retail network to 1028 outlets.

 Community Post, a new sponsorship programme, provided 537 community groups throughout New Zealand with $120,000 worth of postage-paid envelopes.

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