AusPost Profit Plummets Despite Record Revenue

Australia Post has reported before tax profits of $41 million for the last financial year, plummeting two-thirds from the $126 million in profit the year before.

Growth in the e-commerce sector where Australia Post hopes to lead helped bring parcels & services revenue to more than $4.7 billion, 68 per cent of the group’s record $6.99 billion revenue.

The bulk of parcels were domestic, growing 9.2 per cent to $3.2 billion.

International parcels increased more than 15 per cent to $586 million.

Qantas recently agreed to provide three Airbus cargo jets to the service at a cost of $1.4 billion.

Australia Post CEO and managing director Christine Holgate said e-commerce businesses were increasingly opting for Australia Post to handle delivery.

“This year we saw record domestic and international parcel revenue as more and more customers are choosing Australia Post as their preferred partner to deliver their e-commerce ambitions,” Ms Holgate said.

The postal service is in the midst of a transition from letter delivery into a highly competitive parcels & services market, with letters now accounting for less than a third of the company’s revenue.

Letters revenue fell 9 per cent last financial year to a little over $2.2 billion, generating a loss of $192 million.

The Australian Competition and Consumer Commission is currently assessing a proposal from the postal service to raise the cost of letter delivery from $1 to $1.10, which Ms Holgate argued was necessary to allow Australia Post to continue meeting its community service obligations.

“Without an increase to the Basic Postage Rate, Australia Post will no longer be able to afford to fully subsidise the losses from the important post business, which would risk the closure of community post offices and a reduction in services,” Ms Holgate said.