Australia Post delivers $200m full-year earnings loss

The government-owned enterprise announced it had made a loss before tax of $200.3 million for the 2022-23 financial year, down from $55.3 million profit in the previous year.

It said letters volumes were down by 2 billion, a figure which is down 7.8 per cent on last year. It was a different story for parcels and services revenue. This was reported at $7.3 billion, up 0.9 per cent from last year.

The historic losses in the letters business were reported at $384.1 million, up 50.2 per cent from the previous financial year.

"We now have a distinct two-speed business, with our letters business weighing heavily on our ecommerce-driven parcels business, retail and other services," group CEO and managing director Paul Graham said in a statement.

While it is its first full-year earnings loss in eight years, it is also only the second since it became a self-funded government-owned enterprise in 1989.

It comes amid the Albanese government's review of Australia Post, which it wants to modernise and make more financially viable amid growing digitisation.

"Today's results show that the company faces significant structural headwinds, from changing consumer trends to growing digitisation," Communications Minister Michelle Rowland said in a statement.

"The Albanese Government is committed to supporting Australia Post modernise so that it can continue delivering the essential services consumers and small businesses rely on to stay connected.

"Change will be needed to ensure that a high quality and sustainable letters and parcels service is maintained."

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The self-funded government-owned enterprise said further losses are expected unless Australia Post can "secure the necessary support required to modernise its business".

"The headwinds Australia Post is facing into aren't new and it's my job along with the leadership team to transform and modernise Australia Post, so it can once again be a financially sustainable business," Mr Graham said.

"If we do everything in our power to run this business well and we get a favourable regulatory response towards modernisation, I'm confident that Australia Post will return to profit. Without this support, the FY23 loss will be followed by many more. Inaction could result in a greatly devalued Australian asset.

Earlier this year, Australia Post warned in its February half-yearly update that it was at a "crossroads" due, in significant part, to letter delivery being in an "unstoppable" decline.

The update showed a profit before tax of $23.6 million for the six months to December 31, down 88.2 per cent from the same time last year.

Australia Post said on Thursday that letters volumes were down 7.8 per cent from last year, despite an increase in business-related letters including "consecutive interest rate rises and data breach notifications".

It said the average Australian household currently receives only 2.2 addressed letters each week, down from 8.5 each week in 2008. It said this is expected to almost halve in the next five years.

Australia Post will likely get a boost in the next update from the current Voice referendum pamphlet mail-out.