Supply chain wins over mail at Australia Post

Australia Post earned a record pre-tax profit of $561.7 million in 2006/07 (up 8.9 per cent on the previous year), according to the corporation’s Annual Report.

This record financial result underlines the strength of the postal corporation, with revenue growth in all three of its core business areas – letters, parcels and retail – also contributing to record-high revenue of $4.71 billion (up 4 per cent).

Australia Post’s 2006/07 Annual Report also indicates that Australian mail volumes are continuing to grow, despite predictions that paper-based mail would decline in the era of electronic communications.

Domestic letter volumes grew by 1.9 per cent (or 93.1 million items), which is the strongest increase in letter volumes since the 1990s. And domestic parcel volumes increased by 3.7 per cent – making this the fifth successive year of robust growth for Australia Post’s parcels network.

For the second time in a row, the organisation’s supply chain business (parcels & logistics) exceeded that of the letters business ($255.9 million vs. $160 million).

Other key results and highlights from the 2006/07 Annual Report include:

  • a record net profit of $400.7 million
  • return on revenue of 11.9 per cent
  • productivity improvement of 3.2 per cent
  • total mail volumes increased by 1.8 per cent to 5.51 billion items
  • the delivery network now reaches 10.26 million addresses (up 218,000 on previous year)
  • the maintenance of Australia’s largest retail network, with 4,449 postal outlets
  • workplace safety improved, with a record low LTIFR of 7.4 lost-time injuries per million work hours
  • the launch of a new brand advertising campaign: Australia Post – Part of every day.

The strong profit result means that the postal corporation will return a dividend of $296.9 million (based on 75 per cent of net profit) to its shareholder, the Federal Government. The Annual Report also reveals that Australia Post paid $474.9 million in government taxes and charges during the year.

Australia Post’s Chairman, David Mortimer, said: "Our ongoing growth stems from a consistent focus on our three core businesses – letters; retail & agency services; and parcels & logistics. While we’ve managed enormous change over recent years, we’ve maintained a strategic focus on investing in and improving these three core business areas.

"We know our business platform is sound – and this year’s strong results confirm that we’re pursuing the right strategy. So we’ll be investing our remaining profits in programs that will help to broaden our revenue base, control our costs and maintain our high service standards."

Australia Post’s Managing Director Graeme John said he was pleased with the strong results achieved across all areas of the corporation.

"The continuing growth of our parcels and logistics business was the single largest contributor to this year’s result," Mr John said. "Our growth in parcels and logistics is partly driven by online trading but it’s also due to an increasing recognition among Australian businesses that we offer an efficient and comprehensive range of distribution services."

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