Australia Post has announced an interim profit of A$33.6m (US$21.8m) for the half-year to December 31, 2023, a A$10m (US$6.5m) increase on the previous six-month period (1H23).
The improved performance was partly attributed to a record peak period, when almost 100 million parcels were delivered across the country, as well as the post’s Post26 strategy, which aims to simplify its business.
The Parcels and Services revenue increased 1.3% to A$3.86bn (US$2.52m), and the post made A$140.8m (US$91.7m) in efficiencies through disciplined cost management.
However, the post said ‘significant structural headwinds remain’, with lettermail revenues declining by 2.7% to A$857.9m (US$559m) compared with 1H23 as customer visits to post offices decline as online services replace over-the-counter transactions.
According to group chief executive officer and managing director Paul Graham, Australia Post is expected to record ongoing full-year losses.
“I am pleased to see green shoots from the Post26 strategy starting to emerge. We have been very disciplined in managing our costs in a high-inflationary environment and are focusing on simplifying our operations and making the changes needed to build a sustainable business,” he commented.
“I’m proud that we delivered a record peak period, and I would like to thank the millions of Australians who placed their trust in Australia Post at Christmas to deliver their gifts around Australia and the world.
“On behalf of the leadership team and the board of Australia Post, I would like to thank our 63,000 team members for their dedication and hard work over the record peak period, where almost 100 million parcels were delivered.
“We are in the early stages of the modernization of Australia Post and now more than 18 months into our Post26 business simplification strategy,” he continued. “Post26 is delivering significant benefits to the business and, subject to approval, I am confident the modernization reforms announced in December will also strongly enhance the business. We look forward to the continuing support of the government, union partners and community stakeholders.
“Despite the green shoots, there are still fundamental structural challenges confronting Australia Post as letter use continues to decline and fewer customers utilize our retail network. The new delivery model we are trialing will help address the decline in our letters business, but our outsized retail network will need to be addressed.
“Importantly, Australia Post remains as relevant as ever to the lives of millions of Australians, and with our modernization and simplification journey under way we are in a stronger position to continue supporting the nation than we were 12 months ago,” Graham added.
Consultation has now been completed on the first phase of the modernization reforms announced by the federal government in December 2023. While the regulations are yet to be issued, Australia Post expects to see further financial performance improvement once they are implemented. However, further reform is required for Australia Post to become a financially sustainable business.
Read an exclusive interview with Paul Graham in the March 2023 issue of Parcel and Postal Technology International
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