Australia Post has called for an urgent stamp price hike, warning community post offices could close as the service struggles to offset plummeting letter revenue.
Fixed costs for the postal service’s letters business climbed again during the year as volumes declined and addresses grew, with the mail segment draining $192 million in profit from the full-year result.
Earlier in August, Australia Post wrote to the ACCC seeking to increase the basic postage rate by 10 cents to $1.10 a stamp.
Chief executive Christine Holgate doubled down on Thursday and said a failure to lift postage prices for the first time in three years could result in the closure of certain services.
“Without an increase to the basic postage rate, Australia Post will no longer be able to afford to fully subsidise the losses from the important post business, which would risk the closure of community post offices and a reduction in services,” Ms Holgate said.
“Australia Post is absolutely committed to honouring our community obligations … but urgent help is required.”
Australia Post must wait for ACCC approval before it can raise prices.
The service said its burgeoning parcels business helped prop up its full-year result but it was not enough to offset the impact of decline in letters, with group profit dropping by 67 per cent to $41 million.
Revenue from parcels and services increased by 7.7 per cent to $4.77 billion but revenue from letters fell almost 9.0 per cent to $2.2 billion.
Australia Post said profit was at the same point it was three years ago but with 822 million fewer addressed letters delivered to over 700,000 more homes and businesses.
The service forecast increased group revenue in FY20 as it increased its parcel proficiency but pressure on profitability would continue due to ongoing letter losses.