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Annual Report

Highlights of the Year 2008/09

Mail volume

Hongkong Post serves a total of 2.89 million residential and business addresses throughout the territory. In 2008/09 we handled 1.38 billion mail items, amounting to a slight decrease of 2.1% compared with 2007/08, but still representing an average of 3.78 million items per day.

Local mail accounted for about 86.2% of the total traffic handled by Hongkong Post. This represented a 3.7% decrease in volume in 2008/09. International mail, however, experienced an increase in volume of 9.3% compared with the previous year, accounting for 13.8% of total traffic. The major destinations for outgoing international letter mail and parcel traffic were the USA, the UK, Australia, the Mainland and Japan.

Financial performance

Revenue and operating costs

Hongkong Post recorded total revenue of HK$4,556 million in 2008/09. This represents growth of 4.2% compared with the previous year and was mainly attributable to a considerable increase in postings of parcels, bulk airmail and transshipments during the year under review.

Operating costs for the year were HK$4,207 million, representing an increase of 6.2% compared with 2007/08. Operating profit totalled HK$349.3 million for 2008/09, with a rate of return amounting to 9.9% on Average Net Fixed Assets.

New initiatives for increased efficiency

In 2008/09, Hongkong Post continued to install Vertical Preparation Postman Fittings at the Tuen Mun Central Delivery Office and Tsuen Wan Delivery Office to improve its mail preparation work. This, together with the new mail flow system implemented in early 2009 in conjunction with the new Mechanised Letter Sorting System (MLSS), has helped us optimise our staff resources and make our mail delivery service more efficient.

Major overseas destinations	Revenue (HK$ million)	Operating costs (HK$ million)
	Total $ 4,556	Total $ 4,207

Mail volume (million items)	Local mail volume (million items)	International mail volume (million items)

New Mail Centre Project

In order to make way for the construction of the Shatin to Central Railway, the existing International Mail Centre (IMC) building located in Hunghom will be relocated to Wang Chin Street in Kowloon Bay. Hongkong Post also plans to take this opportunity to relocate its General Post Office (GPO) sorting office to the new building in Kowloon Bay, maximising the land use and enhancing mail sorting efficiency by consolidating its activities at a single facility with improved building design, systems and equipment.

On April 17, 2008, a New Mail Centre Division was established to oversee the relocation of the IMC and the GPO sorting office. A postal consulting firm is assisting in the mail workflow and building design, equipment specification and procurement, and transitional arrangements relating to the relocation. The project is expected to be completed in the next three to four years.

The new mail centre will consolidate Hongkong Post's operations and
enhance its efficiency.

Opening of Hongkong Post Logistics Centre (Tuen Mun) The Hongkong Post Logistics Centre (Tuen Mun) began to operate on April 18, 2008. The Centre is equipped with a state-of-the-art warehousing facility. Logistics services represent one of Hongkong Post's new revenue streams, and the opening of the new Logistics Centre will enable us to expand our capabilities in this area.

The new logistics centre at Tuen Mun is enabling Hongkong Postto expand its logistics services.

To serve customers better, the Shek Wu Hui Post Office extended the range of services it provides.

Branch network and services The North Point Post Office was closed down on May 17, 2008 as the district is well served by other post offices nearby. Elsewhere, as part of Hongkong Post's programme of continuous improvements, the Tin Yiu Post Office and Texaco Road Post Office were relocated, with the latter being renamed the Yeung Uk Road Post Office after relocation. Following these adjustments,there are now a total of 127 post offices in our retail network. To better serve our customers in the Sheung Shui area, the Shek Wu Hui Post Office began accepting postings of bulk airmail, Hongkong Post Circulars, Permit Mail and mail items for Postage Prepayment in Money with effect from January 19, 2009.

Five post offices underwent major maintenance works during the year.

Post office maintenance programme During the year, major renovation work was carried out at Sheung Wan Post Office, Repulse Bay Post Office, Happy Valley Post Office, Yau Yat Tsuen Post Office and Tai Koo Shing Post Office. Another 22 post offices have been earmarked for maintenance work in 2009/10.

Hongkong Post launches new "iMailR service" The Internet has created many new opportunities for international trading. Back in August 2005 Hongkong Post introduced a "Bulk Registered Air Mail service" (BRAM) to support the development of e-commerce. With online trade now booming, we responded to market demand for streamlining posting procedures by launching a new "iMailR service" on July 14, 2008 to replace the BRAM service. This new service facilitates customs pre-declarations, and offers customers a fast, simple and reliable way of making bulk postings. It also includes two value-added options: a supplementary insurance service and an online credit card payment facility. The new "iMailR service" also provides online sellers with a number of one-stop solutions such as information on postal restrictions and enhanced mail tracking facilities for major destinations.

Implementation of an Electronic Customs Pre-advice System We continue to explore new technology with a view to further streamlining our operations and providing customers with better, faster services. In the past year, we completed the development of an Electronic Customs Pre-advice System which allows our Speedpost account customers to prepare posting documents and enquire about posting history via the Internet. Customs declaration information can also be transmitted electronically to overseas destinations that require electronic customs pre-clearance.

e-Post centres provide clients with comprehensive and secure postal solutions.

Expanding the e-Post business In response to demand for an integrated service for processing the mass-mailing of statements, in February 2009 a second e-Post Centre was established. Both of our e-Post Centres are equipped with sophisticated machinery and high level security systems, giving us the ability to provide clients with postal solutions which are not only comprehensive, but also extremely secure when it comes to the handling of personal data and confidential information.

"One Person, One Letter" Free Post Day

Letter-writing is not only a traditional method of communicating, it is also one of the most personal and intimate ways of doing so. On October 9, 2008, Secretary for Home Affairs Mr Tsang Tak-sing visited the General Post Office in support of "Free Post Day", organised by Hongkong Post, where he took the opportunity to post a personal letter free of charge. This was the fifth time Hongkong Post has given people the opportunity to send a personal letter free of charge to a recipient in Hong Kong. The purpose of this initiative is to promote letterwriting as a unique mode of communication, to encourage people to express their love and care towards others in writing, and to celebrate World Post Day, when countries around the world celebrate the anniversary of the establishment of the Universal Postal Union (UPU).

This year, the special posting boxes installed in all post offices, except the mobile post offices, collected over 48,000 free post items, about four times as many as last year.

Students were keen in participating in the "One Person, One Letter" activity.

"Linking People, Delivering Business" Offers from Hongkong Post

To help SMEs in the difficult business environment, we introduced 11 discount offers between December 2008 and March 2009. These offers, which were very well received, included a "$20 off" deal for each Speedpost item posted, 10% off postage for Speedpost Freight and FreightPLUS services, a new "Economy Express" service to Guangdong Province, a significant price cut for users of the time-critical "Next Flight Out" service, a half-price offer for those requiring the Speedpost pick-up service, and special discounts on the Hongkong Post Circular Service.

Hongkong Post and Korea Post collaborate on e-commerce Hongkong Post believes that fostering closer cooperation between postal administrations will allow it to better grasp business opportunities arising from booming online trade, as well as helping counter the negative impact of the recent economic turmoil. On February 18, 2009, a new e-commerce collaboration between Hongkong Post and Korea Post was launched, which aims to introduce customers to a wide selection of popular products from e-merchants. This new collaboration will provide more cost-effective promotion and delivery options in both Hong Kong and South Korea.

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