The South African Post Office has posted a 48% drop in net profit to R152.7-million in the year to March, hit by high input costs and declining mail volumes.

Revenue, however, was up 3.5% to R5.9-billion.

Acting chief financial officer Nick Buick said above inflation wage increases, high fuel prices, and roll-out of new retail outlets affected the results.

About 26 new post office outlets opened during the period in focus. Mail volumes declined for the third year by 3.7% in the period under review from a year earlier.

"In an environment where established global postal operators face structural decline with a huge fall in mail volumes and stiff commercial pressures, it is commendable that our revenue diversification strategy continued to strengthen as mail volumes declined," said group chairman, Vuyo Mahlati.

Postbank, the financial services arm of the Post Office, posted an increase in non-interest revenue of R88-million as well as an increase of R331-million in its depositors book, despite a low interest rate environment.

Buick noted that Postbank would, in the next few months, become a fully-fledged financial services group, targeting the lower end of the market.

Parliament passed legislation last year - the SA Postbank Law - to establish Postbank as a separate corporate entity.

The group also announced that its CEO Motshoanetsi Lefoka had taken leave of absence pending the hearing of an investigation into the lease for its new Centurion offices, estimated to have cost R450-million in irregular expenditure. - I-Net Bridge