Profit after tax of $274.5 million also reached a new high, $15 million up on last year. This facilitated a $9 million lift in normal dividends to $164.7 million – a 60 per cent distribution.

In tightening trading conditions total revenue was steady, a reasonable result considering $95.5 million was forgone as a result of absorbing the GST. Declining growth in the economy, in conjunction with the dislocating effects of the 2000 Olympic Games on general business activity, were major factors that contributed to the downturn.

Underlying profitability has suffered as a result of the absorption of the GST, however in order to maintain profitability levels, the corporation has managed to mitigate the full impact. The most significant benefit was the saving associated with the reduction in the corporation’s contributions and reimbursement of costs to the Australia Post Superannuation Scheme. This is primarily due to the ongoing surplus in funds as identified in the actuarial assessment.

A series of significant one-off adjustments represented a net $42.5 million of operating profit. This included property sales and the introduction of full equity accounting for Australian air Express. The reduction in the level of abnormal items and redundancy packages have also assisted achievement of the reported profit before tax.

In summary, a timely reduction in superannuation contributions, tight cost control, labour productivity improvements of four per cent and consolidation of the improved mail network, all contributed to the corporation’s success in 2000–2001.
The corporation invested $249 million on capital expenditure (capex) programs throughout the year. As expected, this level of investment is below that of recent years due to the significant previous investments made in restructuring the mail processing network (FuturePost).

Significant expenditures related to information technology applications ($79.2 million) including e-commerce developments, the mail processing network ($52.5 million), and the ongoing upgrade and replacement of the transport fleet ($30.4 million).
Cash balances improved by $118.6 million to $569.6 million as a result of the strong profit performance and the timing of expenditure payments on capital projects.

The corporation is well placed to pursue strategic opportunities in logistics and e-commerce activities as well as supporting the current capex program which includes the $109.7 million Large Parcels Project.

The corporation also has sufficient funds provided to meet the special dividend of $109.8 million in addition to the final normal dividend payment from 2000–2001 of $85.2 million.
The successful completion of Post’s program to implement the new taxation system incurred $8.7 million in costs in the current year, some $6.5 million less than budgeted.

Total expenditure on tax reform amounted to $34.1 million over the two-year implementation period.
In the current economic climate, the corporation is facing challenges to maintain its current profitability. While its 45 cent price freeze on the standard letter rate and flow-on impacts of the absorption of GST continue, ongoing cost reductions will continue to be a key focus. The newly formed Supply Chain and Property Solutions Division, which includes procurement activities, is constantly working towards improving cost efficiencies at all levels throughout the organisation.

The Statement of Financial Position is forecast to remain strong and will benefit from positive operating cash flows in 2001–2002.

With the four-year, $550 million FuturePost investment operational, the corporation is now positioned to consider further growth opportunities to broaden the current revenue base. The recently endorsed Large Parcels Project, e-commerce initiatives and the expansion of Post Logistics will drive the attainment of new growth opportunities.



Click for Five-year Trends

Further labour productivity improvements were achieved (% representing five-year cumulative growth)	Record operating profit before tax ($ million)
Total revenue steady despite GST absorption ($ million)	Mail volumes reduced in line with economic activity (million)
Return on assets in line with expectations (%)	Strong ordinary dividend payments driven by record profits ($ million)

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