NZ Post has announced a net profit after tax of $6 million for the 2020 financial year as parcel deliveries boomed after the level 4 lockdown.
The result follows a $121m loss the previous year which was impacted by declining letter deliveries.
There were still 72 million fewer letters sent this financial year compared to 2018/19 however parcel deliveries were up by 1 million overall with over 80 million delivered.
This includes domestic parcels up 5 million while international was down 4 million due to COVID-19.
NZ Post chief executive David Walsh says the organisation was initially hit hard by the alert level 4 lockdown across all service lines but once restrictions eased domestic parcel volumes increased dramatically.
“There was a huge surge in the volume of domestic parcels sent when restrictions on what New Zealanders could buy online lifted at the beginning of alert level 3.
“During the first two weeks of alert level 3, we received 3.5 million parcels to deliver – which is approximately 200 parcels per minute, a level of volumes we had been planning to receive in 2023.
“However, this came with extra cost, as we had to bring on more people and vans, physical distancing and extra processing sites,” Walsh says.
“COVID-19 showed the absolute best of our people; every day our front line was out in communities delivering essential items to New Zealand.
“It is our people who got us through the massive challenges of unprecedented online demand after level 4 was lifted.
“Not only did they help keep New Zealanders connected, but their hard work has also helped support and grow New Zealand businesses, some of which had to quickly start selling online for the first time.”
During the first COVID-19 response, in the level 4 lockdown the number of letters sent dropped by up to 50%, international services declined due to global disruptions to supply chains, and NZ Post retail outlets were closed.
Due to the disruptions to revenue streams, NZ Post applied for and received a COVID-19 wage subsidy of $29.7m.
“We’re really proud that we were able to get through these lockdowns with our workforce intact,” Walsh says.
The parcel demand is helping the company focus on where it needs to concentrate efforts looking ahead.
“This volume tested our network like never before, and is another example of why we need to invest for the future. Since then we have launched a ten-year, $170 million infrastructure investment plan to make sure we meet our customers’ expectations and help them grow for the future, as online shopping increases,” Walsh says.
The investment programme begins with construction of a new super depot for parcels, in Grenada, Wellington, an upgrade to the Southern Operations Centre in Christchurch in 2022 and will also include a new processing centre in Wiri, Auckland, due to open in 2023.
This year the Government also confirmed its support for NZ Post in Budget 2020 , including:
- A $130m over three years commencing on July 1, 2020, for mail contract for services to support the continued delivery of mail and allow time to develop the future of mail.
- An equity injection of up to $150m to recapitalise and strengthen reserves, which gave NZ Post the confidence to invest in infrastructure to meet the demand of online shopping.
“We’re extremely proud of the essential job we have done connecting people in these uncertain times. While we have some work to do on the future of mail, our role in the upcoming General Election delivering EasyVote packs and supporting vulnerable people with a postal voting option continues to show the importance of our mail service,” Walsh says.
“We’ve spent time considering what went well during our COVID-19 response and of course, where we could have done better. We’ve learnt good lessons about how to do things differently for our customers and people, which we are applying, and will be built on as we turn towards what is traditionally the busiest time of the year for us, Christmas,”he says.
