Group revenue for the six months to 31 December 2021 has hit $4.80 billion for Australia Post.
The national parcel carrier today announced the 10.4 per cent year-on-year increase, driven by the strongest parcel volumes in Australia Post’s history.
Group profit before tax also improved to $199.8 million thanks, in part, to asset sales and revaluations, as well as favourable bond rate movements.
Letters revenue of $935 million was down 1.2 per cent on last year, despite the significant 2021 Census mail out.
Operational costs which increased by 13.2 per cent on last year, reflect volume increases and COVID-19 related network constraints which are likely to continue in FY23.
Parcels and Services revenue was up almost $464.5 million, or 13.6 per cent, to $3.87 billion, a result of 15 million people in lockdown stemming from COVID-19 Delta outbreak across NSW and Victoria, which led to the strongest parcel volumes in the organisation’s history.
Despite the network challenges associated with having thousands of team members needing to isolate during this critical time it failed to deter capital investment during the period as it ballooned to $217.8 million, up $28.4 million on last year.
In a statement Australia Post confirmed it had committed $400 million to new parcels facilities, fleet and technology by mid-2022 to help service the growing demand for services.
That brought 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.
StarTrack also delivered strong results, with a disciplined focus on costs and an increase in volumes.
Letter volumes were down 0.7 per cent with revenue down 1.2 per cent. The continued structural decline of letter volumes and rise in delivery points for this important community service resulted in losses for the half of $69.9 million.
Australia Post anticipates letter losses will continue, contributing to an overall loss in the next six months while it also expects eCommerce will be more subdued in the second half.
Australia Post continued to generate savings from business efficiency programs implemented across the organisation including head office support costs by $17.1 million.
Group expenses increased 10.2 per cent, driven by additional costs incurred as the organisation worked through the pandemic related network constraints, as well as limited domestic and global air transport capacity.
Group Chief Executive Officer and Managing Director, Paul Graham, said the result was a significant achievement given the ongoing disruptions to the business during the COVID-19 pandemic and the necessary network changes required to continue to provide essential goods and services to customers.
“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 Graham.
“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,” he said.
“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. 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.”
Graham said the retail network of more than 4,300 Post Offices continued to provide critical government and financial services, particularly in rural and remote Australia, where Bank@Post remained an invaluable service for communities.
“We had 112 million visits to our corporate and Licensed Post Offices across the country in the first half, with 20 million visits alone in December,” he said.
Australia Post secured new Enterprise Agreements during the half, for more than 30,000 Award level employees, with the market leading agreements delivering a guaranteed nine per cent pay increase over the next three years for Australia Post and StarTrack team members, while also maintaining key existing terms and conditions of employment.
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.
In other news, a funding boost of $209.36 million will fast-track Queensland road safety works.