NZ Post annual profit up 4 percent

By NZPA

Thursday 26th September 2002

State-owned New Zealand Post announced a net profit after tax of $21.9 million for the year ended June, up 4.1 percent on the previous year.

NZ Post chairman Jim Bolger said in a statement today that the result was pleasing, given the development costs associated with Kiwibank during the year.

Kiwibank is NZ Post's banking subsidiary and recently reported a maiden June year loss of $10.2 million, slightly lower than it initially projected.

The bank, which opened its doors for business in February, is expecting to remain in loss for three years because of set-up costs.

Chief executive Elmar Toime said NZ Post's domestic mail volumes had increased against a worldwide trend of decline, although they were unlikely to increase at a higher rate in the future.

"Our core business has performed well with domestic letter volumes increasing by 0.8 percent, driven by good economic conditions and the 2001 local government and 2002 general election campaigns.

"On May 3 we processed 6.9 million items, the highest volume ever recorded on a single day. This beat the previous record of 6.7 million items processed on Free Post Day in July 1996," Mr Toime said.

"While we don't expect domestic letter volumes to grow at a faster rate in the years ahead, we do expect the business segment to continue to be profitable."

NZ Post would not raise the price of a 40c standard stamp.

Service performance for mail delivered on time improved to 96.1 percent from 95.7 percent in 2001.

"At 40c, the standard letter rate remains one of the cheapest in the OECD and at the same price as it was 15 years ago. If the price had increased with inflation since 1987, it would now cost 65c to send a letter by Standard Post," Mr Toime said.

NZ Post's operating revenue was up 1.2 percent at $966.4 million, compared with the previous year ($954.7 million).

Expenses increased by 2.0 percent to $931.4 million ($13.2 million), largely as a result of the planned expenditure on Kiwibank.

Excluding Kiwibank, overall expenditure dropped by $1.2 million (0.1 percent).

An interim dividend payment of $9.6 million was made to the shareholder -- the Government -- with a final dividend of $3.5 million to be paid on September 30.

"We are confident New Zealand Post will continue to grow by strengthening its core business capabilities, building Kiwibank and exporting our expertise and equipment through Transend Worldwide," Mr Toime said.

Total equity rose to $303.9 million, from $208.5 million the previous year.

NZ Post will primarily focus on building up Kiwibank, with the aim of increasing profitability overall next year.

Kiwibank has about $150 million in deposits as of today, compared with $86.2 million at the end of the financial year, and had lent more than $100 million ($43 million at year end).

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