Australia Post reports revenue growth for HY22

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Australia Post (AusPost) has reported A$4.80bn (US$3.48bn) of revenue for the six months to December 31, 2021, a 10.4% year-on-year increase. This period saw strong parcel volumes but a decline in letter volumes, with the post also contending with Covid-19 staffing issues.

The improved group profit before tax was A$199.8m (US$145m). AusPost noted that this was underlined by asset sales and revaluations, as well as fortunate bond rate movements. It is expected e-commerce will be more subdued in the second half of the financial year while letter losses will continue, contributing to an overall loss in the next six months. AusPost nevertheless predicts a “modest profit” while being conscious of the ongoing uncertainty of Covid-19 and pressures facing customers.

Parcels and services revenue was up almost A$464.5m (US$337.1m), which represented a 13.6% increase, to a total of A$3.87bn (US$2.8bn). This increase was understood to be a result of the Covid-19 Delta outbreak across New South Wales (NSW) and Victoria in Australia, which put 15 million people into lockdown.

However, the group’s letter revenue of A$935m (US$678m) was down 1.2% from last year as letter volumes were down by 0.7%, despite the significant 2021 Census mail out. The continued structural decline of letter volumes and rise in delivery points for this service resulted in losses of A$69.9m (US$50.7m) for the half.

During this time, the company’s operational costs increased by 13.2% since last year, reflecting volume increases and Covid-19-related network constraints which the group predicts are likely to continue in FY 2023. Group expenses increased 10.2%, driven by additional costs incurred as the organization worked through the pandemic-related network constraints, as well as limited domestic and global air transportation capacity. The company generated savings from business efficiency programs implemented across the organization including head office support costs by A$17.1m (US$12.4m).

AusPost’s capital investment also increased during this period by A$28.4m (US$20.4m) from last year, to A$217.8m (US$158m). This forms part of the A$400m (US$287m) investment that was committed to new parcels facilities, fleet and technology by mid-2022 to help service the growing demand for services. Altogether this brought the total committed investment to approximately A$1bn (US$725m) over three years. The business also committed an additional A$20m (US$14m) in upgrading systems to cloud-based solutions over the next year to improve parcel scanning and tracking in the network.

Australia Post also secured new enterprise agreements during the period, for approximately 30,000 award level employees, with agreements delivering a guaranteed 9% pay increase over the next three years for Australia Post staff, while also maintaining key existing terms and conditions of employment.

Paul Graham, the CEO and managing director of the group, said, “Just like many businesses around the country, we have dealt with unprecedented challenges over the past year, but the ability of our people to adapt during ongoing challenges presented by the Covid-19 pandemic has been nothing short of remarkable. Together, we worked tirelessly to manage the health and well-being of our people, with isolation rules and travel restrictions across different states and territories all carrying different challenges – while our people remained resilient and delivered for our communities.

“I want to thank all of our people for the spirit they’ve shown and their willingness to get the job done for our customers. It is a credit to all of our team members in processing, delivery, customer service, our Post Offices (including Licensed Post Offices) as well as our contractor partners.

“Our retail network of more than 4,300 Post Offices continues to provide critical government and financial services, particularly in rural and remote Australia, where Bank@Post remains an invaluable service for communities. We had 112,000,000 visits to our corporate and Licensed Post Offices across the country in the first half, with 20,000,000 visits alone in December.”

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