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NZ Post, Kiwibank profit reduces for year

NZ Newswire logoNZ Newswire 26/08/2016 By Pattrick Smellie

State-owned New Zealand Post and its banking subsidiary Kiwibank both reported reduced profits after tax for the year to June 30, with NZ Post's result bolstered by one-off benefits from an Australian asset sale and Kiwibank experiencing a difficult second-half to the financial year.

The Kiwibank group, which includes savings, insurance and investment products, saw profit fall 0.8 per cent to $131 million in the latest financial year, with the banking operation providing $124m of that total.

"The flat result reflected the challenging environment following global uncertainty and increased funding costs for banks," said chief executive Paul Brock.

Meanwhile, NZ Post reported net profit after tax of $141m for the year the June 30, down 1.4 per cent, characterised by chief executive Brian Roche as "confirming a steady year-on-year financial performance for the group overall".

A major contributor to the profit result was the $43m net proceeds from the sale of NZ Post's Converga subsidiary in Australia, for A$75m ($NZ78m) generating a gain of NZ$43m, and freeing up capital funds for investment.

Total revenues were down 6.6 per cent for the year at $1.49 billion, matched by an equal per centage drop in spending, at $1.34b. NZ Post declared a $5m dividend for the year to the Crown.

"The profit is largely due to Kiwibank and the proceeds from the sale of NZ Post's Australian-based subsidiary Converga to Canon Australia," Roche said.

"Kiwibank had a good first half performance, however this was not matched in the second six months."

NZ Post's postal services business "made a small loss", with letter volumes continuing their long term decline at a rate of approximately 8 per cent over the previous year, although parcel volumes and revenues rose 6.4 per cent and 2.9 per cent respectively and the company would "actively explore market opportunities to grow our core future business in parcels," Roche said.


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