Annual Report

Last year was challenging but rewarding for Hongkong Post since we steered through a period of unprecedented turmoil and volatility brought about by the global credit crisis. With the world economy at real risk of falling into a deep recession, however, our operating performance was unavoidably affected by sluggish economic activities and negative consumer sentiments.

Against such a backdrop, mail traffic registered an overall decline of 2.1% as compared with 2007/08, dragged down by domestic mail which fell by 10.9% in the second half of the year, offsetting a corresponding rise of 3.3% for international mail during the same period. But we managed to meet the annual targets due to robust performance in the first six months as well as a relentless drive for better productivity and cost-effectiveness.

Total revenue recorded for the year showed a modest increase of 4.2% to HK$4,556 million on the back of rising demand associated with e-commerce, enabling us to achieve a return rate of 9.9% on fixed assets. We are acutely aware of the importance to tighten our grip on this emerging sector of growth, as reflected by our decision to host the inaugural e-commerce conference of the Universal Postal Union in May 2009. Apart from according higher priority towards developing innovative ways to improve the standard and variety of services available to our clients, relocation of the International Mail Centre to make way for construction of the Shatin to Central Railway presents a timely opportunity to group our two major sorting centres together under one roof with upgraded systems and equipment for enhanced capacity and efficiency. Meticulous planning is now being put into this project with a view to ensuring its smooth execution.

The extraordinary events happening in the past year serve as a reminder to all of us on the need to keep up with rapid changes in the external environment and seek diversification into new revenue streams. Specifically, we will focus attention on exploring venues through which synergy could be achieved with our counterparts in the Mainland by leveraging on the "Outline of the Plan for the Reform and Development of the Pearl River Delta (2008-2020)".

The outlook for 2009/10 remains shrouded by uncertainties surrounding a fledging economic recovery. Many external factors such as upward pressure on postal rates brought about by revision of the Terminal Dues System are beyond our control; the status as a trading fund also largely determines our internal cost structure. Despite these constraints, we will strive to maintain our core values and corporate culture so as to sustain quality customer service. Faced with an evolving competitive landscape, Hongkong Post should build upon its trusted public image and continue to assist small and medium enterprises in coping with the demanding conditions and underlying dynamics in a globalised market.

We could not have accomplished so much without a firm pledge to serve the community and a steadfast commitment to uphold our mission statement of "Linking People, Delivering Business". I would like to thank our clients for their unwavering support as well as my dedicated team of staff at Hongkong Post for their exceptional resilience and outstanding professionalism.

Clement CHEUNG
Postmaster General and
General Manager of the Post Office Trading Fund