Australia Post feels the pinch from international competition

National courier, Australia Post, faces structural and competitive headwinds despite delivering group revenue of $5.0 billion AUD (approx. €2.9 billion) for the half year to 31 December 2024.

Interim profit before tax for the reported period was $249.1 million AUD (approx. €144.9) million, up $215.5 million AUD (€125.4 million) from $33.6 million AUD (€19.5 million) in 1H24.

More than 262 million parcels were delivered across Australia during 1H25 which was a 3.0 per cent increase from the prior corresponding period.

Letter volumes declined by 98.2 million in the half representing a 10.6 per cent reduction on the prior corresponding period.

In 1H25, $87.2 million (€50.7 million) in savings was realised as costs were removed, non-core businesses closed and operations streamlined.

Government modernisation reforms have also contributed to improved performance however more reform is required for long-term financial stability.

Competition in the parcels market, Australia Post reported, remains intense particularly as large global logistics and platform providers invest billions into their Australian operations.

Australia Post CEO and Managing Director, Paul Graham, said the organisation is continuing to make significant progress on achieving its Post26 strategy.

“These results demonstrate the material improvement we’ve achieved across most areas of the business as we execute on our Post26 Strategy and implement the modernisation reforms,” he said.

“This would not have been possible without the support of our 64,000 team members who, day after day, deliver for our customers and the community.

“We remain focused on transforming the business to secure our long-term viability. I would like to acknowledge the valued support of the Communication Workers Union, who continue to work collaboratively with us as we have rolled out the New Delivery Model to more than 119 sites nationally to date.”

Decline in letter volumes is a global trend.

“We do not anticipate the Letters service will ever return to profitability,” said Graham.

“The Parcels sector is becoming increasingly competitive, as we see global disrupters making significant investment in Australia, along with a rise in new entrants and start-ups.

“While the e-commerce industry is still experiencing modest growth, Australia Post is competing against providers who don’t make the same important contribution to Australia’s job market, economy and community wellbeing that Australia Post does and will continue to do.

“In this environment of increasing competitive headwinds and ongoing structural challenges, further reform is required to ensure the long-term relevance and financial sustainability of Australia Post.

“The outlook for the second half remains challenging and we cannot afford to be complacent because we have seen an improvement in our first half bottom line, which is traditionally profit-making. Competition is intensifying, and our traditional revenue streams are shrinking.”