Australia Post first-half profit jumps

Australia Post’s sharp rise in first-half earnings comes as its parcels business thrives and postal service stabilises.

Parcels are working well for Ahmed Fahour and even the bleeding on the letters service has been stemmed. Pic: Stuart McEvoy

Australia Post has reported a sharp jump in first-half earnings as its parcels business continued to expand and its legacy postal business showed signs of stabilisation.

In the six months to December 31, the state-owned postal group reported net profit of $131 million, up eightfold from last year’s $16m result.

The reading came on an 8 per cent jump in revenue to $3.52 billion.

The positive result came as controversy continues to swirl over the hefty $5.6 million pay packet chief executive Ahmed Fahour received last year.

The yearly salary represented the highest by any Australian public servant on record.

Australia Post noted domestic parcel volumes rose 5.7 per cent as online shopping gained a greater foothold, dragging that division’s pre-tax earnings up 16 per cent to $189m.

The troubled postal operation returned to break-even as cost cutbacks and higher stamp prices overcame an 11 per cent decline in letter volumes.

“This is one of the strongest first half results in recent history and it demonstrates that we are on the right path to ensuring the future of Australia Post for our people, the community and our important stakeholders,” Mr Fahour said.

“(Our parcels) market share is increasing and at the same time we’re trialling new delivery innovations like evening and weekend deliveries to give our customers an even better experience.”

Mr Fahour added recent regulatory changes that have allowed higher prices and slower delivery times for regular letters have been crucial to a stabilisation of its postal business.

“Through the important postal reform program, we have avoided the need for a multi-billion dollar rescue package,” he said.

“It has also meant we have kept our people in meaningful employment while returning a dividend to the federal government.”

The first-half is typically stronger than the second given the impact of Christmas on online shopping and card sending behaviour, with Australia Post today offering broad guidance that its fiscal 2017 result will top last year’s $36m profit.

“It’s important we continue to focus closely on making sure our business is running as efficiently as possible, especially as we head into what is traditionally a much more challenging second half,” Mr Fahour said.