NZ Post profits increase by more than 200%

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NZ Post has made a net profit of NZ$102m (US$61.5m) after tax for the year ended 30 June 2022 – a NZ$70 (US$42.2m) or 219% increase over the previous year.

To capitalize on these profits, the company’s Wellington Super Depot is scheduled to be formally opened in October 2022. A new processing center in Wiri, Auckland, is also scheduled to commence operations in 2023. These openings follow NZ Post’s Christchurch Processing Centre, which officially opened in August 2022. These investments are intended to improve customer experience through delivery efficiency and greater digital parcel transparency.

According to the company, this profit has been driven by an increase in earnings from NZ Post’s share in Kiwi Group Holdings and growth in NZ Post’s parcel segment. Since this announcement, NZ Post has agreed to sell its 53% shareholding in Kiwi Group Holdings Limited (the parent company of Kiwibank) to the Crown. The company reportedly expects this transaction to settle in the first half of this new financial year.

Additionally, parcel revenue for the company grew to NZ$658m (US$396m), up NZ$137m (US$82.6m) from the previous year. This reflected a volume growth of 93 million parcels delivered, which was an increase of eight million on the previous year, including pricing adjustments and the acquisition of Fliway.

Furthermore, in the 2021/2022 financial year, NZ Post signed a financing agreement with New Zealand Green Investment Finance (NZGIF) to accelerate the transition of the NZ Post fleet and those of its delivery contractors to low-emission vehicles. The company also acquired Fliway Group to broaden its product and service offering, extending into larger items and broadening its logistics and supply chain capability.

David Walsh, CEO of NZ Post, said, “Reflecting on the last year, given all the factors we had to navigate, our financial performance was pleasing, but we have much higher expectations on long-term performance. The next couple of years will be extra challenging as we face into rising costs and a tight labor market. In the shorter term, we’ve prioritized our people. We will also have costs impacting our earnings until our network investments and a mail solution begin to deliver the expected benefits.

“Revenue from our parcel segment continues to perform strongly, in line with the growth in online shopping seen during the 2021/2022 financial year. This revenue growth was driven by volume increases, including Covid-19 lockdown-related volume surges and large peaks of online spending during holiday and event shopping days. Letter volumes continue to decline as New Zealanders choose to communicate more online.

“In the 2022 financial year there were 238 million letters delivered, a decrease of 36 million (or 13%) on the previous year, contributing to an overall NZ$45m (US$27m) decline in revenue in the mail segment. We are continuing to progress work on a sustainable long-term solution for mail services, which will include pricing, cost and operating model changes. We note that volume growth in the parcel segment has since returned to more normal levels since New Zealand’s lockdowns of 2021. During the year, the investment into our parcel processing infrastructure has continued at pace.”

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