NZ Post cuts dividend

By Phil Boeyen, ShareChat Business News Editor

Thursday 20th September 2001

State-owned postal business New Zealand Post has announced a slightly lower profit and cut its dividend payout in preparation for opening a new bank.

The company recorded an after-tax profit of $21 million for the year ended June compared with $21.9 million for the same period last year.

Chairman Dr Ross Armstrong says the result was creditable given increased volatility in mail volumes and higher fuel costs.

Operating revenue was up 5.1% at $981.9 million which the company says reflects growth in international parcels and the purchase of Australian courier business, Couriers Please.

Operating expenses also rose, up 4.7% due to the acquisition of Couriers Please and investment in developing the proposal for the new retail bank.

NZ Post says government approval for the provision of $78.2 million to establish banking services within the New Zealand Post retail network was a major highlight for the year.

This figure includes $6 million in foregone dividends, leaving a dividend payout to the government of $7.4 million.

Chief executive, Elmar Toime, says the latest result is a sound one considering a 1.6% decline in domestic mail volumes.

"In the year ahead, we will implement marketing strategies that promote mail as a business communications tool to stimulate letter, parcel and unaddressed mail volumes.

"New Zealand Post will introduce new services, including banking, to better utilise its retail network. We will also continue to develop new capabilities to meet the demand from our customers for electronic services related to physical delivery and messaging."

In August the company moved to full ownership of electronic information delivery business, MessageMedia, which it purchased from eVentures (NZSE: EVZ).

NZ Post expects to be given its banking licence from the Reserve Bank later this year. Standard & Poor's said Wednesday the new bank is likely to be given the same AA- credit rating as its parent.

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