Annual Report

Highlights of the Year 2007/08

Mail volume

Hongkong Post serves Hong Kong's 2.85 million residential and business addresses. In 2007/08, we handled 1.41 billion mail items, which on average is 3.86 million items per day and represents an increase of 5.8% compared with 2006/07. During the year, over 8 million copies of annual reports were handled and around 14 million election mail items were processed, both of which convey critical information to stakeholders and are essential to the continued prosperity of Hong Kong. Of the total traffic handled, local mail accounted for 87.6% and international mail for 12.4%, representing volume increases of 6.2% and 3.2%, respectively, compared with the previous year.

Major overseas destinations

The USA, UK, Australia, Mainland China and Japan remained major destinations for international letter mail and parcel traffic.

Performance

Hongkong Post's mail business has continued to grow with the increasing trend of economic trade through the Internet and the rise in commercial volumes. As the majority of our mail volume is of commercial nature, concerns about an increasingly challenging economic environment, both locally and globally, have created some uncertainty in regard to mail volume for the coming year

Financial performance

Hongkong Post recorded total revenue of HK$4,373 million in 2007/08. This represents growth of 6.3% compared with the previous year and was mainly attributable to the 5.8% increase in mail traffic during the year under review.

Revenue and operating cost

Operating costs for the year were HK$3,960 million, representing an increase of 8.0% compared with 2006/07. Operating profit totalled HK$412.8 million for 2007/08, with a rate of return amounting to 12.2% on Average Net Fixed Assets.

Business Development

Mechanised Letter Sorting System

To meet changing operational and service needs, and to enhance operating efficiency, a replacement Mechanised Letter Sorting System (MLSS) is being installed in phases. With advanced technologies, the new MLSS combines and improves the functions of the Optical Character Reader (OCR), Video Coding Machine (VCM) and Letter Sorting Machine (LSM) to streamline and optimise mail flow. Installation of the new MLSS began in phases in January 2008, and full implementation is expected to be completed by mid-2009.

Rationalisation of Branch Network and Services

Post offices are primarily set up to meet government's social objective of providing postal service within easy reach of the population living or working in a locality, and we had 128 post offices in the retail network as at 31 March 2008. With a view to optimising resources, four counter offices were closed down in 2007/08, namely, Wong Chuk Hang Post Office, Garden Road Post Office, Harbour Building Post Office and Canton Road Post Office.

During the year, due to leasing issues, we relocated the Kowloon Bay Post Office, and temporarily closed the Causeway Bay Post Office until suitable premises can be secured in the Causeway Bay area.

To align counter opening hours with traffic pattern and customer flow, and thus better serve customer needs, an extensive review of the business hours of counter offices was carried out during the year. After a trial period, the business hours were revised for Causeway Bay Post Office, Cheung Sha Wan Post Office, Kowloon East Post Office, Shek Wu Hui Post Office, Tsat Tsz Mui Post Office, Tsim Sha Tsui Post Office, Airport Post Office, Fo Tan Post Office and Tsuen Wan Post Office.

14 post offices earmarked for renovation

Maintenance Programme for Post Offices

To provide a better environment for our customers and staff, a maintenance programme was initiated in October 2007 for all post offices to be refurbished in a regular cycle. A Senior Maintenance Surveyor was seconded from the Architectural Services Department to oversee this programme, and 14 post offices were earmarked for renovation in the first year. During the year, major renovation work was conducted at Stanley Post Office, Hennessy Road Post Office and Heng Fa Chuen Post Office.

Restoration of Stanley Post Office

Stanley Post Office is the oldest post office in Hong Kong and has been in service since 1937. It was restored to its original condition during a refurbishment programme in 2007 and now serves both as an operational post office for the local community and as a historical tribute and charming tourist attraction for Hong Kong.

Access 1.6 million addresses
in Shenzhen

Cross-border Direct Mail Service

In response to market demand for more efficient communication between Hong Kong and the Mainland, we have partnered with China Post to develop cross-border direct mail. Shenzhen was the starting point for providing the service in the Mainland with the goal of extending the service to other major Mainland cities.

Hub and Logistics service

An important milestone in the logistics collaboration between Hongkong Post and China Post Logistics Co. Ltd. (CNPL) was reached in December 2007, in providing one-stop logistics solutions in Greater China. We signed a Logistics Collaboration Memorandum of Understanding with CNPL in January 2008 to set the framework of the co-operation and position Hongkong Post as the local sales and execution operation and transhipment hub for CNPL. The opening of the Hongkong Post Logistics Centre in Tuen Mun at the end of March 2008, to provide warehousing and logistics services for CNPL's key corporate clients, symbolises a significant landmark in providing a one-stop logistics solution in Greater China.

Over 1 million items would be
processed in 6 months

Expanding the e-Post business

Our e-Post service is a simple and effective way to help customers save their time, money and manpower on processing massive invoices and statements. We provide a one-stop shop service including printing, enveloping, posting and delivery and leave the customers free to focus on their core businesses.

A new e-Post Centre was established in July 2007 to take advantage of a growing market. The e-Post Centre is certified by the Architectural Services Department to meet the high level of building security required in handling confidential information.

Promotion of Letter Writing

"One Person, One Letter" Free Post Day
Hongkong Post is considered to be amongst the best performers in the world in delivering mail and we took the opportunity of the World Post Day on 9 October 2007 to promote letter writing by organising the "One Person, One Letter" Free Post Day. This is the fourth time Hong Kong's postal service has invited the public to express love and care by means of a personal letter, free of postage, to a recipient in Hong Kong. More than 10,000 personal letters were sent through the Free Post Day activity.

Writing letters to Santa Claus
To encourage children to develop the habit of letter writing, Hongkong Post invited children to write to Santa Claus before Christmas 2007. Some 400 letters were received in this programme and 50 lucky ones were selected in a draw by the Finland Consulate of Hong Kong together with the Postmaster General. These letters were then personally delivered to Santa Claus in Finland by the Postmaster General during his duty visit to Finland Post in November.

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