U.S. Markets closed

Profits Plunge At AusPost

FreightWaves

Australia Post, a government-owned post and freight service, has reported revenues of just under A$7 billion but has experienced a massive fall in profits.

Australia Post reported full-year revenues of just under A$7.0 billion (US$4.7 billion), which represents a 2% rise, along with a massive 47% plunge in profit down from A$126 million to A$41 million.

Australia's financial year runs from July to June. At the time of writing, 1 Australian dollar equaled US$0.68.

"This full-year profit result is in line with that achieved three years ago although masks the significant transformation from a letter business to a growing delivery and services organisation," AusPost said.

AusPost is grappling with the legacy of a declining letters business as revenues shrink but fixed costs (those costs, such as rent, that do not fall or rise with the volume of business done) continue to rise.

Revenues from letters fell by 9% in the last financial year to A$2,216 million, while losses increased to A$192 million.

"Fixed costs to operate the letter business continue to rise with increasing delivery points, although there has been no increase to the basic postage rate in over three years, when Australia Post delivered 822 million more letters. It is important letter pricing is addressed responsibly to ensure essential community post services are protected," the company said in a statement. 

"Without an increase to the basic postage rate, Australia Post will no longer be able to afford to fully subsidise the losses from the important post business, which would risk the closure of community post offices and a reduction in services. Australia Post is absolutely committed to honouring our community obligations and appreciates the essential role we play in communities, but urgent help is required," the company said.

Revenues from the carriage of domestic parcels rose by 9.2% to A$3.18 billion and revenues from the international parcel business also rose, by 15.7%, to A$586 million.  

AusPost last year delivered more than three billion items. That's more than 1.3 million parcels a day. Auspost delivers to about 11.9 million delivery points across Australia. The company has 4,356 post offices and its network included 15,085 street-sited post boxes; 7,000 motorbikes; 6,500 delivery vans; 2,600 trucks and six airline freighters.

Image Sourced from Pixabay

See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.