Historic declines in letter deliveries have driven Australia Post to report a full-year earnings loss for the first time since 2015, and it is expecting further losses down the line.
The government-owned enterprise announced it had made a loss before tax of $200.3 million for the 2022-23 financial year, down from a $55.3 million profit in the previous year.
It said letters volumes were down by 2 billion, a figure which is down 7.8 per cent on last year. It was a different story for parcels and services revenue. This was reported at $7.3 billion, up 0.9 per cent from last year.
The historic losses in the letters business were reported at $384.1 million, up 50.2 per cent from the previous financial year.
Australia Post said on Thursday that letters volumes were down 7.8 per cent from last year, despite an increase in business-related letters including "consecutive interest rate rises and data breach notifications".
It said the average Australian household currently receives only 2.2 addressed letters each week, down from 8.5 each week in 2008. It said this is expected to almost halve in the next five years.
Australia Post will likely get a boost in the next update from the current Voice referendum pamphlet mail-out.
"We now have a distinct two-speed business, with our letters business weighing heavily on our ecommerce-driven parcels business, retail and other services," group CEO and managing director Paul Graham said in a statement.
It is its first full-year earnings loss in eight years, and only the second since it became a self-funded government-owned enterprise in 1989.
It comes amid the Albanese government's review of Australia Post, which it wants to modernise and make more financially viable amid growing digitisation.
The self-funded government-owned enterprise said further losses are expected unless Australia Post can "secure the necessary support required to modernise its business".
"The headwinds Australia Post is facing into aren't new and it's my job along with the leadership team to transform and modernise Australia Post, so it can once again be a financially sustainable business," Mr Graham said.
"If we do everything in our power to run this business well and we get a favourable regulatory response towards modernisation, I'm confident that Australia Post will return to profit. Without this support, the FY23 loss will be followed by many more. Inaction could result in a greatly devalued Australian asset.
Earlier this year, Australia Post warned in its February half-yearly update that it was at a "crossroads" due, in significant part, to letter delivery being in an "unstoppable" decline.
The update showed a profit before tax of $23.6 million for the six months to December 31, down 88.2 per cent from the same time last year.
Karen Barlow
Karen Barlow is ACM's Chief Political Correspondent. Working in the federal press gallery, she investigates and writes about federal politics and government. She has an interest in integrity, leadership and social equity. She has covered two Olympics and been to Antarctica twice. Contact her on karen.barlow@canberratimes.com.au
Karen Barlow is ACM's Chief Political Correspondent. Working in the federal press gallery, she investigates and writes about federal politics and government. She has an interest in integrity, leadership and social equity. She has covered two Olympics and been to Antarctica twice. Contact her on karen.barlow@canberratimes.com.au
