Snail mail’s decline hits Australia Post as parcels surge stops
Australia Post boss Paul Graham says the headwinds facing the national postal carrier have never been stronger as the decline of snail mail hits its profits at the same time the COVID-induced online shopping sugar rush wears off.
The company is heading for a full-year loss for the first time since 2015 as it grapples with rising costs and the continued decline of paper letters, Graham warned on Wednesday as he released the company’s first-half results.
“For more than a decade, Australia Post has been flagging concerns about the long-term viability of the business as it currently operates,” he said.
Australia Post expects that households will be receiving less than one letter per week by the end of the decade. Credit:Justin McManus
“We know letters are in an unstoppable decline, thanks largely to digital communications, yet letter costs are rising due to the increasing number of delivery points we service every day. This all contributes to increased losses, and is a global issue facing all postal services.”
Losses in Australia Post’s letters delivery business ballooned to $189.7 million for the half, a surge of 171.5 per cent on last year.
The company expects that Australian households will be receiving less than one letter per week by the end of the decade.
Overall, the company recorded revenues of $4.69 billion for the six months to December, but its group profit before tax slumped 88.2 per cent from last year to $23.6 million.
While COVID-19 lockdowns delivered a surge in parcel deliveries, Graham said parcels growth is moderating and the boost the group has seen from the pandemic online shopping rush has now abated. Parcels revenue was down by 1.6 per cent for the half, to $3.8 billion.
Graham is leading a strategy to get Australia Post into a more sustainable long-term financial position, called Post26.
“We are focusing on streamlining our product portfolio making us easier to do business with and continuing to be a leader in sustainability,” Graham said. “However, further changes to the way we operate are necessary.”
More to come.
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