Australia Post says its overall performance has improved in the first half of 2024 – in part – due to a record peak period with almost 100 million parcels delivered across Australia.
It has reported an interim profit of $33.6 million – an increase of $10 million on the prior corresponding period.
However, ongoing losses in the Letters business of $182.1 million in the first half, as well as declining customer visits to Post Offices as online services replace over-the-counter transactions, continue to impact the long-term viability of the business.
Outlook Group Chief Executive Officer and Managing Director, Paul Graham says while the improved performance in 1H24 was welcome, he cautions Australia Post is anticipating recording ongoing full year losses.
“I am pleased to see green shoots from the Post26 strategy starting to emerge. We have been very disciplined in managing our costs in a high-inflationary environment, we’re focusing on simplifying our operations and making the changes needed to build a sustainable business.
“I’m proud that we delivered a record peak period, and I would like to thank the millions of Australians who placed their trust in Australia Post at Christmas to deliver their gifts around Australia and the world.”
While Australia Post’s Post26 strategy to simplify the business is starting to deliver financial benefits, significant structural headwinds remain. Australia Post’s Letters revenue declined by 2.7 per cent to $857.9 million compared to 1H23.
This result would have been more than $90 million weaker without the $0.10 increase to the Basic Postal Rate (BPR). At the same time, the Parcels and Services business recorded a revenue increase of 1.3 per cent to $3.86 billion, highlighting the two-speed nature of the business.
Through disciplined cost management, $140.8 million in efficiencies was achieved in 1H24, which included further simplification of the support office, product portfolio and broader network productivity improvements.
Letter volumes have decreased 11.9 per cent over the past 12 months and Letters losses were $182.1 million for the half. The continuing structural decline of the Letters business is unstoppable, with Australians now receiving on average just two letters per week.
The move away from over-the-counter transactions in favour of digital services continues to undermine the performance of the Corporate Post Office network. In 1H24, over the counter transactions fell by 4.1 per cent and foot traffic across the Corporate Post Office network continued to decline.
However, Australia Post is trialling new retail formats, like the Community Hub @ Post concept launched in Orange last year, which offers a range of expanded services and a focus on e-commerce.
Late last year, Australia Post commenced a voluntary licence hand back program for eligible Licensed Post Offices (LPOs) in metropolitan areas, where there is a significant oversupply of postal outlets.
For more information on Australia Post, click here.