Australia Post has lost $384 million on its letter businesses, after the service revealed its first full-year loss since 2015.
Announcing a group loss of $200 million for the 12 months to June 2023, the result is the second time that the group has recorded a loss since it was established as a government enterprise in 1989.
As the group’s operations transition towards parcel delivery, rather than letters, it has become an increasing strain on profitability.
Currently, the average Australian household receives only 2.2 addressed letters each week, down from 8.5 each week in 2008. This number is expected to almost halve in the next five years.
But under community service obligations, Australia Post is required to maintain 4,000 post offices. In the 2022 financial year it had 4,310 post offices, 2,513 of these in rural and remote areas, which it claims cost more than $1.3bn to run.
While Australia Post’s letter business suffered heavy losses, its parcels and services business continued to perform strongly, recording revenue of $7.3bn in FY2023.
“The headwinds Australia Post is facing into aren’t new,” Australia Post chief executive and managing director Paul Graham said.
“We have a laser-like focus on simplifying our business, we’re stripping out the complexity accrued over a number of years and investing in our key growth area of parcels.”
“We now have a distinct two-speed business, with our Letters business weighing heavily on our eCommerce-driven Parcels business, retail and other services.”
Amid increasing letter losses, Mr Graham called on the federal government to pursue regulatory reforms to enhance the service’s viability
“We have a clear plan and we’re doing everything we can within our control, however we need regulatory support,” he said.