Profit before tax has fallen by 46% for Australia Post as losses in the letter division canceled out strong results elsewhere.
For the six months up to December 31, 2019 group revenue was up 4% to A$3.8bn (US$2.5bn) but profit before tax was down to A$83m (US$54.8m).
Parcel and postal revenue was up 13% to A$2.7bn (US$1.8bn) with strong growth in parcels, financial and international services.
This was the highest revenue growth in over a decade without a major acquisition, and profits grew 12% to A$193m (US$127m).
Letter revenue was down 9% to A$1.1bn (US$725m) and losses increased 112% to A$87m (US$57m).
Although A$129m (US$85m) of efficiency savings were made, this has not fully compensated for the increasing costs supporting the service.
Christine Holgate, group chief executive officer and managing director, said Australia Post’s strategy to diversify the business is working well.
“The costs to operate the letter business continue to rise, as our people are still required to deliver to every home or business every day, process and collect the mail, while letter volumes and revenues fall,” Holgate said.
“The A$0.10 (US$0.07) letter increase in January will support our letters business going forward, but after four years of no increases, it alone will not fully compensate for the losses.”
Australia Post had its busiest Christmas ever with over 50 million parcels in December, along with 190 million letters.
Before Christmas, Australia Post opened the largest parcel processing facility in the Southern Hemisphere in Brisbane and invested in automation across a number of facilities.
The workforce also had to contend with extreme weather with droughts and bushfires, and though Australia Post did not lose any facilities or post offices, many employees lost homes and property.
Holgate said, “Our Post Offices and posties were able to play an essential role supporting impacted communities including with access to critical funds through our Bank@Post services, providing free mail redirection, mail hold services and accepting over the counter donations for Red Cross Disaster Relief Fund, which has raised over A$1.4m (US$924,000) to date.”