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NZ Post Profit Up 27 Pct To $110m, But Dividend Down

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Sept 24 NZPA - New Zealand Post lifted annual net profit 26.9 percent to $110.2 million, but its dividend payment to the Government will be 23.7 percent down at $23.5 million.

The result for the year to the end of June was achieved on revenue up 7.9 percent to $1.29 billion, and compared with net profit the previous year, restated for new accounting standards, of $86.8m.

Chief executive John Allen said that in addition to a strong contribution from subsidiary Kiwibank, the NZ Post Group's performance was well supported by a higher than expected contribution by the Datamail Group.

Traditional postal and retail businesses were affected by the economic slowdown during the second half of the year.

Factors contributing to the rise in net profit included a $5.9m lift in Kiwibank's net profit to $36.8m, and a non-recurring gain of $24.8m from the creation in June of joint venture Express Couriers Australia. NZ Post's operating profit for the year rose 21.2 percent to $114.4m.

Mr Allen said the fall in dividend from the state-owned enterprise was partly due to the fact dividends were not paid on Kiwibank profits, as it was felt investment continued to be needed in that business.

Secondly, the $24.8m gain from the establishment of the Australian joint venture was reinvested in that business.

Current economic headwinds would have an impact on the first half of this financial year, Mr Allen said.

Despite that, he expected earnings growth from NZ Post's investment in technology and capability during the past five years, as well as from the underlying strengths of the group's distribution infrastructure and consumer brands.

NZ Post's postal services segment reported a fall in revenues from operations to $840.2m from $846.6m the previous year. Profit for the segment was down to $58.7m from $68.9m.

The company said the economics of the postal business were changing all the time. Volumes were declining, the number of addresses delivered to was increasing, and the items delivered were heavier and bulkier.

While the price of posting letters had been held at 50c this year, a new system of pricing directly related to an item's size and weight had been introduced.

While the decline of traditional mail volumes continued, dropping about 1.5 percent last year, parcel volumes had grown about 1 percent.

NZPA WGT mjd nb

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