​Australia Post returns to profit of AU$36m, continues ecommerce investments

Australia Post has made a AU$258 million recovery in profit after tax on EBITDA of AU$400 million and revenue of AU$6.6 billion.

Australia Post continued to make ongoing investments in ecommerce while it managed to also turnaround its 2016 full year profit by AU$258 million.

The government-owned postal organisation reported full year profit after tax of $36 million, a significant recovery when compared to the net loss of AU$222 million recorded during the previous year. It attributed the upturn to the strong performance of its parcel business that saw profits increase 8 percent to AU$314 million.

Earnings before interest, tax, depreciation, and amortisation also improved from AU$14 million recorded for FY15 to AU$400 million for the full year, as did revenue which increased 3 percent year on year to AU$6.6 billion.

On the other hand, addressed letter volumes continued to decline, falling by 9.7 percent, which contributed to a loss in the postal business of AU$138 million.

Despite the ongoing decline in snail mail, group CEO and managing director Ahmed Fahour remains positive, saying the changes the organisation made to the letter business earlier this year also contributed the group returning to profitability.

"While the letters business is in structural decline, we have reduced our forecast cumulative losses in letters from around $5 billion to $1.5 billion over the next five years," he said.

"Our business is 207 years old, but we are more efficient and motivated than ever before. We have to continue to evolve to remain relevant and sustainable, so we can continue to serve customers and communities everywhere."

Some of the ecommerce investments made during the year by the organisation included announcing a strategic alliance with global logistics provider Aramex to facilitate cross-border logistics and delivery support for Australian businesses and customers; appointing Greg Sutherland as chief innovation officer to drive customer innovation; and installing automation technology at major letters and parcels processing facilities in Melbourne and Sydney to improve efficiency.

In March, Australia Post also announced a partnership with Data61 to clean up and digitise three areas: Trusted services, which includes securing purchases from its online store and building easy-to-use services backed by what it called advanced cyber capabilities; the future of logistics, by applying expertise and insight to the data from Australia Post's trucks and parcel deliveries to drive advances in supply chain management and methods of delivery; and digital government services, which is centred on improving how Australians can access and utilise government services when and where they need.

A month later, Australia Post teamed up with local startup ARI Labs to trial the use of drones to deliver small parcels, in particular critical items such as medication, around the country.

"RPA technology will continue to evolve over the coming years and while we're not sure what role it will play in our future, we do think there are opportunities for time-critical deliveries or where there are significant distances between the road and front door," Fahour said at the time.

In the past, ARI Labs developed and manufactured drones for airfield sensor calibration for the Australian Government Department of Defence Maritime Surveillance Management and Target Systems SPO.

Earlier this month, Australia Post Ventures, the organisation's incubation arm, said it has begun exploring the use of blockchain in three potential areas: Identity, registries, and e-voting.

In the identity space, Australia Post Accelerator partner Rick Wingfield explained blockchain could help digitise the physical process of verifying a person's identity, as well as a central access station that can be easily retrieved if someone needs, for instance, to prove they are over the age of 18 to gain entry into a bar, without having to reveal to security their private information.

At the same time, Wingfield said blockchain can be used to simplify registry accreditation, whether that's to verify someone is still licensed to drive a car, is able to operate heavy machinery, or can work with children.

The organisation further delved into the usage of blockchain for e-voting earlier this week as part of its submission to the Victorian Electoral Matters Committee, outlining how it plans to move into the business of running elections, beginning with small corporate and civic elections before handling a full parliamentary election.

According to Tim Adamson, Australia Post state director of Victorian Government and Tasmania, using blockchain for voting would allow for a location agnostic, "tamper proof" system that would provide traceability, prevent manipulation, yet allow anonymity, and be resistant to denial of service attacks.

"With demand for digitisation high and technology shifts opening up new approaches we believe that now is the time to solve the digital voting challenge," he said in the submission.


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