Profits at Australia Post for the first half year to December 31, 2024, were up A$215.5m (US$133.9m) to A$249.1m (US$154.8m) compared with the same period last year, with revenues rising 6.3% to A$5.01bn (US$3.1bn).
The improved financial results were predominantly driven by a record peak season and the post’s Post26 modernization strategy. However, the organization warned that it still faces challenges in the second half year.
Paul Graham, group chief executive officer and managing director of Australia Post, commented, “The combination of Post26, modernization reforms and a record peak period has meant the business has responded positively in the short term to the changes we’ve made. However, despite the improved performance, the business is still facing several significant structural and competitive headwinds.
“As we are seeing globally, letter volumes are falling, and this is expected to continue at pace. We do not anticipate the letters service will ever return to profitability.”
Increased competition
Graham continued, “The parcels sector is becoming increasingly competitive, as we see global disrupters making significant investment in Australia, along with a rise in new entrants and startups. While the e-commerce industry is still experiencing modest growth, Australia Post is competing against providers who don’t make the same important contribution to Australia’s job market, economy and community well-being that Australia Post does and will continue to do.
“In this environment of increasing competitive headwinds and ongoing structural challenges, further reform is required to ensure the long-term relevance and financial sustainability of Australia Post,” he added.
“The outlook for the second half remains challenging. We cannot afford to be complacent because we have seen an improvement in our first-half bottom line, which is traditionally profit-making. Competition is intensifying and our traditional revenue streams are shrinking.
“Australia Post remains a cornerstone of the Australian community and is proud to deliver essential services to our customers, from cities and metro areas to our regional, rural and remote communities.”
Cost savings and modernization
More than 262 million parcels were delivered across Australia during 1H25, which was a 3.0% increase from the prior corresponding period. Letters volumes continue their downward trajectory, declining by 98.2 million in the half, which represents a 10.6% reduction on the prior corresponding period.
As part of the Post26 strategy, there is an ongoing focus on simplifying the business. In 1H25, A$87.2m (US$54.2m) in savings were realized as costs were removed, non-core businesses closed and operations streamlined.
Australia Post has said it is well advanced in the implementation of the government’s modernization reforms, which have also contributed to the improved performance in the half. These reforms are helping to build a more financially sustainable business. However, to achieve long-term financial sustainability, further reform is required.
For more information on Australia Post’s 1H25 results, click here.