Wellington, Feb 26 NZPA - State-owned New Zealand Post Group has recorded a 19.4 percent fall in interim profit, which it attributes to the global economic downturn and increasing competition.

The net profit after tax of $42.5 million in the six months to December 31, 2009 was down from $52.8m last year.

The Government will receive a $5.7m interim dividend, down from $6.9m last year.

The company cited supporting Kiwibank's continued growth, addressing declining mail volumes and improving the performance of its Australian courier joint venture, ParcelDirect Group as issues for the future.

Revenue from operations fell 5.3 percent to $621.5m. Expenditure fell by $9.1m to $589m, due to cost control measures. Group profit before tax fell 21.1 percent to $55.1m.

Tight net interest margins and changing fee structures in an intensely competitive banking sector resulted in a reduction from $25.8m to $24m in the net profit of Kiwi Group Holdings, which includes Kiwibank.

"The recessionary conditions in the last financial year continued into the first half of the current year and led to further volume reductions in our postal, courier and distribution businesses," said group chief executive Brian Roche.

The economic downturn accelerated an existing trend of declining letter volumes caused by electronic substitution and competition. This was placing significant pressure on postal organisations around the world.

Domestic mail and parcel volumes handled by the postal services business during the half year were 5.7 percent down on the corresponding previous half year.

Commenting on the outlook, NZ Post said there were signs of an economic recovery though it did not expect the benefits of it to be felt in the second half of the financial year.

The NZ Post results were filed to the NZX.