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David Walsh: NZ Post CEO on NZ Post reporting first net profit since 2023 · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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  Speaker 2: First, though, let's deal with New Zealand Post. There have
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  Speaker 2: been years of losses at New Zealand Post, but finally
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  Speaker 2: they're reporting a net profit today of $ 17 million. That
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  Speaker 2: is a big turnaround of $ 19 million on last year.
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  Speaker 2: It was a $ 2 million loss, obviously. The chief executive
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  Speaker 2: is David Walsh. Hi, David. G'day, Heather.
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  Speaker 3: How are you?
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  Speaker 2: I'm well, thank you. So what's caused the lift in
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  Speaker 2: the net profit?
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  Speaker 3: It's been a lot of hard work and a big
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  Speaker 3: call out to the New Zealand Post team. So, yep,
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  Speaker 3: after another challenging year, but through a good customer service,
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  Speaker 3: good expense control and just doing all the basics right
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  Speaker 3: in the business, we're really pleased to have been able
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  Speaker 3: to report a $ 17 million profit this year.
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  Speaker 2: Do you reckon the automation's helped at all?
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  Speaker 3: It definitely is. What we're learning is as we're dealing
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  Speaker 3: with very busy times, particularly in the personal side of
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  Speaker 3: our business, if you think about last year's Christmas peak,
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  Speaker 3: our ability to put through so much more volume and
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  Speaker 3: control our costs is a lot, lot better than what
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  Speaker 3: we've ever had. So, yep, it is part of our story.
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  Speaker 2: I mean, you're controlling the cost through a reduction, I'd imagine,
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  Speaker 2: in headcount, yeah?
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  Speaker 1: Yeah.
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  Speaker 3: Yeah, certainly we're responding all the time. If you think
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  Speaker 3: about the change on our mail side of the business,
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  Speaker 3: we're always thinking about how do we adjust our costs there.
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  Speaker 3: We've done a lot of work in terms of our
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  Speaker 3: costs and our support structures as well outside of our
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  Speaker 3: daily operations. So we're relentlessly focused on cost, but we
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  Speaker 3: also need to invest where we have to and looking
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  Speaker 3: after our customers is an important part of our success
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  Speaker 3: as well. So It's a bit of everything.
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  Speaker 2: Now, it wasn't at all surprising to see the mail
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  Speaker 2: volumes are still falling, but I was surprised to see
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  Speaker 2: parcel volumes fell. Is that just because of an economy
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  Speaker 2: that's not really at full strength yet?
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  Speaker 3: Yeah, it's pretty flat. We started the year, they were
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  Speaker 3: quite a bit softer at the start of the year.
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  Speaker 3: But what we've noticed is as the year progressed, The
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  Speaker 3: domestic market picked up a bit in terms of volume.
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  Speaker 3: So that came back. There's quite a bit of growth
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  Speaker 3: in the second half of the year in the domestic
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  Speaker 3: parcel demand. But the international market has moved around a lot.
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  Speaker 3: And I suspect it's had a lot of factors in there,
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  Speaker 3: including impacts of fuel, of moving things around the world
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  Speaker 3: as well. So it's a bit of a mixed bag
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  Speaker 3: in there. But the momentum out of the first half
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  Speaker 3: coming into this year, I'm hoping will continue to go.
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  Speaker 2: I see, despite the fact that you've managed this significant improvement,
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  Speaker 2: Simeon Brown's still wanting more improvement from UKIC. Is it
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  Speaker 2: obvious where you are able to do this?
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  Speaker 3: Oh, look, we're pretty lined up on the expectation that
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  Speaker 3: New Zealand Post needs to be a commercially sustainable business.
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  Speaker 3: Our plans for the next few years expect us to
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  Speaker 3: continue to perform and perform well. So, yeah, we don't
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  Speaker 3: think his expectations are unreasonable, and that's what we're working
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  Speaker 3: to do.
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  Speaker 1: Yeah.
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  Speaker 2: Is it obvious to you, though, where to tighten things up?
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  Speaker 3: Look, we do see the parcel side of the business
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  Speaker 3: continuing to grow margins in there. We've got our other
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  Speaker 3: support logistic businesses in Flyway UCS, which we continue to
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  Speaker 3: expect them to lift their performances as well. And mail
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  Speaker 3: will keep declining. We've just got to keep navigating that
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  Speaker 3: as it comes down. So more cost control, good customer
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  Speaker 3: service and doing all the basic things well.
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  Speaker 2: Yeah, well done. Hey, thank you very much, David. Appreciate it.
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  Speaker 2: Look after yourself. David Walsh, New Zealand Post's Chief Executive.
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