Hongkong Post records losses from seven of 10 years

From 2013-14 to 2022-23, Hongkong Post recorded losses from operations during 7 of those 10 years. It recorded a loss from operations of HK$305 million and a rate of return on fixed assets of −13 percent in 2022-23, far from the target of 1.5 percent, according to an Audit Commission report.

The report released Wednesday noted that traditional mail services will continue to be a loss-making business and will generally require cross-subsidization by profits generated from non-traditional services including e-commerce services.

Yet the watchdog’s report said the profitability of local e-commerce services in the period from 2018-19 to 2022-23 was negative each year, and the deficit was around three-fold of the revenue each year during the five-year period.

The watchdog also reviewed the budgeted and actual revenues from local e-commerce services in the period from 2020-21 to 2022-23, finding that Hongkong Post could not attain the budgeted revenue for each of the three years.

Meanwhile, the Commission said a large amount of obsolete stamp stocks pending destruction incurs high administrative costs for Hongkong Post.

It noted that, up to January 31, 2024, the face value of unsold stocks of special or commemorative stamps amounted to around HK$137 million.

The actions were in violation of relevant guidelines and resulted in high costs for inventory, security, and occupying valuable space in strong rooms for storage. The Hongkong Post last conducted a stamp destruction exercise on January 30 this year, it added.