An Post Reports €17 m. Operating Loss
30 July 2003
When an exceptional charge of €52.5 million – for restructuring – is included, the total losses reported for 2002 are €70.5 million, its biggest ever deficit since An Post was established as a commercial State company in 1984.
Describing the results as a cause for serious concern, An Post Group chairperson Margaret McGinley identified rising labour costs as the dominant element in group expenditure and warns that recent increases in prices are inadequate.
Following a lengthy approval process an interim increase for domestic and some international letters services was approved in April 2002. It merely restored the standard letter tariff to the levels of 1991 when the last increase took effect, Ms McGinley said.
“Few businesses would be able to sustain operating margins in such circumstances and given the particularly high inflation rate in Ireland, it is not surprising that the company should now find itself in some difficulty,” the chairperson added.
The Group annual report, which was presented to its annual meeting today, reveals that its three core businesses - Letter Post, the mail division, PostTS (formerly Post Offices division) and SDS, the parcels and courier division - all increased turnover but lost money.
There is particular concern about SDS - which pushed its turnover to €80 million, a rise of €2 million – but where major restructuring has been agreed to transform the business. The introduction of owner/drivers and a new Dublin collection and delivery system will commence in September.
Letter Post, the mails business, saw its turnover increase by €28 million to €427 million. It is dependant on further realistic price increases, the achievement of major savings from its automation programme and the introduction of delivery boxes to make profits.
PostTS, the rebranded Post Offices division, made good progress. Helped by an increase in price for its social welfare payments service and continuing network adjustment, it raised its turnover by €18.2 million to €125.8 million and reduced losses from €13 million to €1.3 million.
Ms McGinley said that in an environment of high inflation and market liberalisation, pricing assumed critical importance. Inadequate progress had been made but the company was pursuing, with ComReg, an application to raise the basic tariff to 48c.
The new Group Chief Executive Donal Curtin said the current financial position of An Post was unsustainable. His primary objective was to stabilise the finances of the company and return the company to profitability as soon as possible. A complete review of the business is under way in the context of preparing a new strategic plan for the Group, he added.
