Letter losses drive Australia Post profit decline, pointing to necessary reform

• HY2015 Group profit of $98 million after tax, down 56 per cent on this time last year, as losses in the letter service grow
  Australia Post forecasts first full-year loss in over 30 years
• Addressed letter volumes fell 8.2 per cent in first half – in line with predictions of accelerated decline
• Parcel services revenue and business parcel volume up four and five per cent respectively, despite an increasingly competitive market
• Addressed letter volumes fell 8.2 per cent in first half – in line with predictions of accelerated decline
• Parcel services revenue and business parcel volume up four and five per cent respectively, despite an increasingly competitive market

Australia Post today reported a FY15 first-half profit after tax of $98 million, down 56 per cent on the first half result of the previous year.

The fall in profit was driven by growing losses of $151 million in the letters business, which is 57 per cent worse than the loss recorded by the letters business in the first half of last financial year. Letter volume decline accelerated to 8.2 per cent, year-on-year, which is the largest decline recorded since Australia Post’s letter volumes started falling in 2008.

Australia Post’s current forecast for the full year is for a company-wide loss – its first since 1982. Losses in the letters business are forecast to overwhelm the Parcels business’ profit in the seasonally quieter second half of the financial year.