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Australia Post delivers profit but letters losses continue

Business

Australia Post has returned to profit despite a record decline in letter volumes.

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Growth in its parcels business and changes to its mail delivery service helped the company deliver a $36 million net profit for 2015/16, a turnaround from the previous year’s $222 million loss.

It believes it has stemmed the losses in its letters service, reducing its forecast cumulative losses for the segment from about $5 billion to $1.5 billion over the next five years.

The introduction of a two-speed letter service has helped Australia Post’s bottom line, although managing director Ahmed Fahour said the letters business was in structural decline.

“Changes to the letters business introduced earlier this year were an important factor in the group returning to profitability,” Fahour said today.

A record annual decline of 9.7 per cent in letter volumes led to a $138 million loss for the postal business.

However, the loss was reduced from the previous year’s result.

Fahour said the group’s parcels service had performed well despite increased competition from overseas players, with its profit up eight per cent at $314 million.

Total revenue for the year was up 3 per cent at $6.6 billion, Australia Post said.

In other results today, APN has posted a $256.9 million first-half loss, almost entirely related to its demerged New Zealand unit and the regional Australian business it is selling to News Corp.

Losses from NZME and Australian Regional Media for the six months to June 30 totalled $249.3 million, but underlying earnings from APN’s remaining advertising and radio businesses rose seven per cent to $35.9 million.

“We have moved a long way towards transforming APN into a radio and outdoor media company, which are both growth sectors in the media industry in Australia,” APN chairman Peter Cosgrove said.

-AAP

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