The ACCC has just pinged Australia Post with greater disclosure requirements after transport companies complained it was abusing its monopoly position to expand its power in the competitive sectors of the freight market. Check out the AAP coverage from yesterday here and the ACCC statement here.
Crikey read the entire 2003-04 Post annual report last night and was amazed at the lack of detail. You get the odd snippet about percentage growth of revenue in the different businesses, but no segment breakdown except for a fairly meaningless domestic and international split.
No wonder the likes of TNT, DHL and Linfox are upset and complaining to the regulator. After all, Post teamed up with Qantas to pay a whopping $750 million to buy Star Track Express from Greg Poche last year, but the annual report tells you stuff-all about how the business is progressing, save for the fact that Post’s equity commitment is only $250 million and the debt remains off balance sheet.
The old Mrs Crikey, who got to know Australia Post pretty well handling our many merchandise offers over the years, has lost track of the number of times customers expressed surprise at the excessive cost of sending a parcel. The profit margins must be fantastic. Sure, the standard 50c stamp remains great value and doesn’t produce much profit for Post, but its other operations are leveraged off this monopoly position and make it a more than useful cash cow for the Howard Government.
Australia Post doesn’t get a lot of media attention for an organisation that has pumped $1.5 billion into the Howard Government over the past five years. It’s one of the last great government’s hollow logs, with minimal debt, $456 million in cash on deposit at 30 June last year, and a superannuation surplus of $869 million when the rest of the government faces a $90 billion super black hole.
Return on equity was a whopping 28.2% last year, and return on assets 15.4% as profit surged another 13% to a record $521 million. Most of this growth came from leveraging its monopoly position in areas like the parcels market – but no financial breakdown is provided.
While we can presume CEO Graham John is the man earning $1.8 million a year, Post still reports executive salaries without names, even though federal parliament required all listed companies to disclose the names of the five highest paid executives. Isn’t it time the federal government started requiring post to reveal the same sort of information?
If you have any more insights into Post’s profits and power, email [email protected].