E-commerce strategy delivers for Australia Post

Internet Retailing

23rd Feb 2017

Australia Post has reported profits before tax of $197 million for the six months ending 31 December, 2016, up from just $1 million in the prior corresponding half.

The strong half-year result was largely due to solid growth in its parcels business, with domestic parcel volumes up 5.7 per cent and parcel profit up 16 per cent to $189 million.

MD and Group CEO Ahmed Fahour said the result validates Australia Post’s transformation to a parcels and e-commerce-centric business.

“Today over 70 per cent of our revenue and 100 per cent of our profit is derived from commercial activities in parcels and e-commerce,” Fahour said.

“This is one of the strongest first half results in recent history and it demonstrates that we are on the right path to ensuring the future of Australia Post for our people, the community and our important stakeholders.”

Fahour said the company is trialling new delivery features like evening and weekend deliveries and has invested in automated sorting technology to capitalise on the growing parcel business.

“On top of the investment in new parcel sorting machines last year, in the past six months we have installed new automated sorting machines at our major letter facilities and launched a new air freight domestic parcels network,” he said.

“We are also responding to global competitors entering the local market by investing in the future. Last year we made a strategic investment in global parcels/e-commerce giant Aramex and we are already reaping rewards in growing our inbound and outbound parcel volumes.”

Revenue grew in the half by eight per cent year-on-year to $3.52 billion and all performance indicators, including on-time delivery for letters and parcels, were met or exceeded, the company said.

While Australia Post saw growth from the rise of online shopping, letter volumes declined a further 11 per cent in the first half of FY2017.

“Without changes to the letters business introduced early last year, independent modelling suggests this loss would have been over $2 billion today,” Fahour said.

“It’s important we continue to focus closely on making sure our business is running as efficiently as possible, especially as we head into what is traditionally a much more challenging second half. We forecast the full year 2016/17 profit result will be better than 2015/16,” he added.