AusPost figures clouded under restatements

AusPost figures clouded under restatements
Letters results suffered as mail monopoly restated accounts 49 times under outgoing CEO Fahour

According to the AFR national postal giant AusPost restated its accounts a whopping 49 times in the six years that Ahmed Fahour was CEO, clouding the ability of outsiders to assess the actual performance of its three key business; letters, parcels and retail, and making it easier for AusPost to present its case to win support for its strategy of moving away from mail.

By contrast in the five years prior to Fahour’s arrival the AusPost accounts were restated just once.

The AFR says that the analysis by William Ammentorp, a former banking analyst and funds manager who now manages his own investments showed that the restatements changed the reported financial performance of the operating segments, with generally adverse outcomes for letters, although they did not affect the overall bottom line.

The analysis revealed that the non-stop restatements made the performance of the letters business look worse than it was and made the parcels business look better. The period in question was the period when Fahour was campaigning for a focus onto parcels and away from letters, which ultimately resulted in AusPost doubling mail prices and halving delivery services.

[Related: AusPost appoints new CEO]

According to the analysis in annual reports in the five years between 2011 and 2016 the Parcels 2014 result was the only instance of earnings before income tax and net interest (EBIT) being the same for an operating segment in the year reported as well as in the subsequent years' annual report. In each of the other 18 instances operating segment EBITs were re-stated.

The AFR analysis says that in 2012 letters revenue was down by $299m due to restructuring, in 2013 further restructuring sent the performance down by $113m, and further restructuring in 2014 sent letters down by $4.2m, while the 2015 report shows yet more restructuring sent letters down by another $145m.

Critics of AusPost, which includes virtually all the country’s print and mailing houses, claim the constant restatements were a strategic initiative designed to help the Board fulfil its aim of transforming the organisation to the detriment of mail.

In addition the latest analysis by the ACCC shows that the AusPost letters service is not performing as well as other national postal services.

Auspost has defended its business, saying that two thirds of its $6.5bn revenue and all its profits now comes from the ecommerce and parcels business.

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