Australia Post letter revenues fell by $220 million (10 per cent) for the full FY20, despite the 10 per cent increase to the basic stamp price implemented on 1 January 2020.
In its full-year FY20 results, Australia Post said that significant disruption in letter volumes in the second half adversely impacted results. It had hoped that the increase to letter prices would offset the letter business decline. The letter business includes large letter services, which includes the delivery of magazines.
Earlier in the year, during the height of Australia’s first COVID-19 lockdown, a leaked review of Australia Post operations by PwC outlined that the organisation’s letter business was a “high risk” area, expected to incur a $426 million loss by 2021.
Australia Post’s parcel and services revenue grew by 15 per cent in FY20, adding $729 million to the full-year result. This was boosted in the second half of the year by the continued growth of eCommerce due to COVID-19 lockdown restrictions and the move of many businesses to online sales as their physical stores hibernated.
Overall, the organisation recorded group revenue of $7,499 million, up 7 per cent from the previous year, and group profit before tax of $53.6 million, up 30 per cent.
Australia Post said that costs increased over the period by $477 million due to higher operational network costs to support growth areas of the business, additional processing facilities and chartered air freight to meet customer demands, and personal protective equipment for workers.
Australia Post Group Chief Executive Officer and Managing Director Christine Holgate said “The pandemic has also severely impacted our ability to deliver across the country on time. We had to make temporary changes, including new parcel pop-up facilities and chartering planes for air freight, to continue to serve the country during what has been a very uncertain year.
“Our Post Office network continued to play an essential role in providing goods and services to local communities. Through bushfires, floods, and a pandemic, our Post Offices kept their doors open. Although traditional services such as letters, passports, and Billpay fell in the period, due to travel restrictions and as businesses switched to digital communications, parcel revenues grew and have become their most important income source.
Australia Post’s 2020 Annual Report will be tabled in Federal Parliament in October 2020.