Australia Post hits $4.8B revenue growth, letter volumes on the decline

Strong parcel volumes have driven Australia Post’s group revenue to hit $4.8 billion in the back half of 2021.

Australia Post announced the 10.4 per cent year-on-year increase, with its parcel and services revenue also rising to $3.87 billion, up 13.6 per cent on last year.

With an estimated 15 million people in lockdown due to the COVID-19 Delta outbreak across NSW and Victoria, online shopping saw a significant surge, which reflected in Australia Post recording the strongest parcel volumes in its history.

Asset sales and revaluations, as well as favourable bond rate movements underlined the improved group profit before tax of $199.8 million.

Letter revenue continued to decline, down by 1.2 per cent to $935 million, despite the significant 2021 Census mail out. This resulted in losses reaching $69.9 million for the December half.

Meanwhile, operational costs increased by 13.2 per cent on last year. This reflected volume increases and COVID-19 related network constraints that are predicted to continue in the 2023 Fiscal Year.

“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,” said Paul Graham, Group CEO and Managing Director at Australia Post.

“Together, we worked tirelessly to manage the health and wellbeing 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,” Graham said.

The company also revealed that capital investment during the period increased to $217.8 million, up $28.4 million on the previous year. This forms part of the $400 million committed to support the eCommerce boom, bringing the total committed investment to more than $1 billion over three years.

The business also committed an additional $20 million in upgrading systems to cloud based solutions over the next year to improve parcel scanning and tracking in the network.

“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,” Graham said.

“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.”

The national parcel carrier has a retail network of more than 4,300 Post Offices around the country, which provides government and financial services, particularly in rural and remote Australia.

In the first half, the company had 112 million visits to their corporate and licensed Post Offices, with 20 million of those in December alone.

Despite the positive first-half results, AusPost said that eCommerce will be more subdued in the second half while letter losses will continue, contributing to an overall loss in the next six months.

“Australia Post will release full year results in September, and at this stage expects to post a modest profit while being cognisant of the ongoing uncertainty of COVID-19 and pressures facing customers,” the company said.

Source: Australia Post newsroom