NZ Post reports Full Year profit after tax of $49m (after tax loss from continuing operations of $56m)
NZ Post is reporting a 2022/2023 Full Year profit after tax of $49m, compared to a profit of $102m in the prior year.
NZ Post Chief Executive David Walsh says, “the reported operating loss after tax of $56m from continuing operations was materially impacted by $43m of provisioned and incurred change costs as we respond to mail decline. This was also the final year of the Government’s Mail Contract for Service, with $37m being paid under this contract this financial year, $24m less than the prior year. When taking these factors into account, the underlying result is in line with expectations, which is pleasing in the challenging trading conditions.”
Key points from 2022/2023 Financial Year
- Full Year profit after tax of $49m, compared to a profit after tax of $102m in the prior year
- One-off provision and incurred restructuring expenses of $43m for recently announced mail changes to progress over the next 5 years, impacting around 750 FTE roles, and to support other restructuring activity in the business
- Total revenue of $1.17b, up $76m (including the revenue of Fliway)
- Parcel volumes of 83.7m (down from 94.9m in the prior year)
- Wellington Super Depot opened in October 2022 and significant progress made on the Auckland Processing Centre
- An increase in wages for our frontline workers and payments to our contractor delivery partners
- Trial of new Hyundai XCIENT FCEV hydrogen truck, the first in New Zealand
- Completed divestment of Kiwi Group Holdings Limited (the owner of Kiwibank)
“While external factors have created challenging operating conditions, we are on the right track to execute our strategy that will see NZ Post continue on its path of being a commercially sustainable delivery and logistics business.”
“Like most businesses in New Zealand, in the financial year we have seen material cost increases. In response to this we have driven cost efficiencies across the business and have also needed to lift pricing of our delivery services. Cost of living pressures mean that Kiwis are shopping online less often, and we’ve seen a slowing in customer demand for parcel delivery. We delivered 83.7m parcels this financial year, down from 94.9m in the year prior, which reflected a temporary high from Covid related demand.”
“Our strategy to invest in parcel processing infrastructure is the right one and we are excited about our future as the long term forecast for eCommerce growth remains strong. We will continue to support Kiwi retailers to succeed.”
“In the financial year we have continued to make significant progress on our 10 year, $200 million plus investment in parcel processing infrastructure and technology. In October 2022 we opened our new Wellington Super Depot, our first automated parcel processing hub in the lower North Island, which has capacity to process up to 11,000 parcels per hour. Work is continuing on our flagship Auckland Processing Centre in Wiri which is due to open in 2024. The Auckland Processing Centre will allow us to process and deliver future customer volume growth.”
NZ Post also continues to respond to the fact that New Zealanders are choosing to communicate more online.
“Twenty years ago New Zealanders sent over 1 billion mail items in the year, decreasing dramatically to around 220 million mail items in the current year, and we predict that this will reduce further to about 120 million items by 2028. This change in behaviour means NZ Post continues to evolve. We are responding to this by working to find the most efficient and cost effective ways to deliver this lower volume of mail for our customers.”
In June 2023 NZ Post announced a reduction of around 750 FTE mail and support roles over the next five years.
“An expense of $43m has been recognised this financial year to support impacted staff as we make these changes, and to support other restructuring activity in the business. Our focus, as always, will be on our people and supporting them with this transition.”
“Looking forward, we expect economic conditions to remain challenging over the short term. Tight cost control and realising the benefits of our investment in our automated sites will be a priority, as we continue to deliver excellent service for our customers. We will continue transforming our mail services. While many businesses in New Zealand are facing into economic headwinds, NZ Post remains confident that our business strategy is the right one and will support Kiwi retailers and businesses to succeed in these uncertain times,” said Walsh.