‘Unsustainable’: Australia Post’s dire warning amid grim results
The national delivery company is bleeding millions and set to post its first loss since 2015 as the end of the pandemic parcel boom unmasks long-standing challenges.
Australia Post will deliver its first full-year loss since 2015 as its first-half financial results paint a grim picture for the struggling national delivery company.
In the first half of the 2023 financial year group profit before tax of $23.6m is down 88.2 per cent from $199.8 million in the first half.
Group revenue was down 2.4 per cent on the prior corresponding period, largely driven by an ongoing decline in letter volumes.
“Australia Post has, for a number of years, been flagging significant structural headwinds,” the company said.
“During Covid-19, the parcels business experienced a temporary surge, which masked the underlying challenges the business has been facing.
“With lockdowns ending and eCommerce volumes moderating, the challenges of the business are now more visible.”
Group profit before tax of $23.6m was considerably lower than the prior corresponding period, largely the result of a record first-half letters loss of $189.7m, compared to $69.9m in the first half of FY22.
Operational costs during the half increased 1.2 per cent from the same period last year to $4.64bn due to severe weather events, rail network disruptions and a 6.1 per cent wage increase granted to EBA team members, effective this half.
Letters revenue fell 5.7 per cent compared to the first half despite a number of one-off mail outs including state election materials, cyber-attack and interest rate notifications. The letters business made a first-half loss of $189.7m.
Parcels and services revenue during the half was $3.80bn, a 1.6 per cent decrease from the first half last year.
The dire results have reaffirmed its push towards driving business and operational efficiencies, with $121.1m realised in the first half.
Australia Post will simplify and streamline the business to help it respond to financial pressures – however it did not detail cost savings.
Group chief executive officer and managing director Paul Graham said it had flagged concerns about long-term viability “for more than a decade”.
“During the Covid-19 lockdowns we benefited from a considerable boost to our parcels business, which has now abated and revealed the unsustainable nature of the status quo,” he said.
“Every year it’s costing Australia Post more to deliver fewer letters. We know letters are in an unstoppable decline, thanks largely to digital communications, yet letter costs are rising due to the increasing number of delivery points we service every day.”
Australia Post tips annual letter volumes will decline further, with households receiving less than one letter per week by the end of the decade.
Despite the conditions, however, Mr Graham said the company delivered a record number of parcels over the cyber sales and Christmas period.
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