NZ Post falls to $35.6m loss

NZPA

Friday 26th August 2011 2 Comments

New Zealand Post Group lost $35.6 million in the year to June due to "a number of adverse impacts", compared to a $1.3 million net profit the year before.

The adverse factors included a negative impact of $29.1m due to the devastating Canterbury earthquakes, along with a write-down of $35m due to the divestment and sale process of part of the group's Australian holdings, Parcel Direct Group.

Bad debt provisioning at subsidiary Kiwibank was $67m higher than the year before in response to depressed economic conditions and the Christchurch earthquakes, NZ Post said.

There were also restructuring costs of $12.3m as part of a major realignment of the business.

Revenue rose to $1.28 billion from $1.2 billion, while underlying profit fell to $41.7m from $73.6m.

Group chief executive Brian Roche said the result was "very disappointing", and the group was confident of a return to profit in the current financial year.

Underlying performance had shown some resilience with major business units such as traditional postal services performing adequately in challenging conditions, Roche said.

Substantial progress had been made in implementing some changes needed it the way the group operated parts of its business.

A plan of action to create a viable, sustainable postal network for the future in the face of inevitable declines in mail volumes would be put the board this financial year, Mr Roche said.

Work would also continue towards transformation of the store network to ensure economic viability.

The past two financial years had been extremely challenging for the group.

In addition to weaker market conditions and the Canterbury earthquakes, the business had needed to make some tough decisions on the carrying value of assets and investments, resulting in negative short term impacts on profit, Roche said.

With most of the significant items affecting the reported result being non-cash, coupled with the trends of recent months, the issues were not expected to have a material effect on the group’s ability to meet its dividend or debt obligations.

Comments from our readers

On 26 August 2011 at 11:52 am steve said:

Govt departments should not be allowed to compete with private businesses. They stuff the market and themselves everytime.

On 26 August 2011 at 1:34 pm Nina O'Fyfe said:

Roche needs to drop his Rugby World Cup committments and focus on the real job of trying to rescue this dinosaur! This SOE has been languishing under inferior leadership since Elmar Toime departed ... cut the lame excuses ... check out the other bank and mail distribution company EOY results!