This was a year of significant challenge and change at Australia Post, as we continued to adapt in order to stay relevant to our customers.
For the 14th consecutive year, we met all of our CSO service performance targets. In 2013–14 we delivered 94.5 per cent of letters on time or early (ahead of our 94 per cent target) and maintained 4,417 post offices nationwide (well above the target of 4,000 access points).
In terms of commercial performance, our revenue increased to $6.4 billion (up 8.3 per cent on last year), but after-tax profit was down 34.5 per cent to $116.2 million.
In addition, we continue to make significant improvements in our safety performance.
On a portfolio basis, the operating EBIT loss in our highly regulated mail services business (predominantly our reserved and non-reserved letters services), increased by 15.2 per cent to $328.4 million – due to falling volumes and the fixed-cost nature of this business. Retail Services earned $175.6 million, which is in line with last year's result. Parcel and Express Services earned operational EBIT of $337.5 million, which is up 20.8 per cent on last year. This is the fourth consecutive year of profit growth in our parcels business – and it was achieved despite a slowdown in ecommerce activity and intensifying competition across the parcels market.
Turning point
As was anticipated and communicated, the corporation made an overall loss in the second half of the financial year. It is the first time that our business has made a loss in any six-month period, since being corporatised in 1989.
This indicates that we have now reached a turning point where we can no longer expect profits from our competitive parcels business to offset the growing losses that we are incurring in the highly regulated mail services business. We believe this is a permanent structural issue and, as a result, we are now actively seeking to change our letters services, prices and operations.
Looking after our stakeholders
As we adapt to the ongoing shift in the community's use of our services, we are very conscious of minimising the impact of service changes for our stakeholders. I am particularly proud of the initiatives we developed this year for our employees (such as Post People 1st), for our licensees (new LPO payment streams and the Rural Sustainability Package) and for disadvantaged and senior Australians (by introducing concession-rate postage).
Investing in tomorrow
I am optimistic about our ability to sustain Australia Post's role as the trusted organisation that connects Australian consumers, business and government agencies. This year, we invested heavily in expanding our parcel facilities, which will, ultimately, double our processing capacity. We also added a broad range of new trusted services that are available in our post offices and online. And we continued to develop the services that are available via the MyPost Digital Mailbox.
We are also integrating our parcel operations and services – and have elevated StarTrack as one of our two core brands, with the responsibility of providing ecommerce-driven logistics and delivery solutions for Australian businesses.
Thank you
It is my great privilege to work with the board, the management team, our employees and business partners. I want to sincerely thank everyone for their contribution to our great business – and for their daily commitment to serving our customers and the Australian community.
Ahmed Fahour
Managing Director & Group CEO