Irish An Post to sell loss-making parcel and freight subsidiary

An Post is to sell its loss-making parcel and light freight delivery subsidiary, SDS, as the semi-state company struggles to return to profitability by 2006.

Company chief executive Donal Curtin has given the board three options for SDS, including its disposal. Last week, An Post reported an operating loss of EUR43 million last year. SDS is believed to have accounted for around EUR40 million of the losses.

Curtin said An Post remained on a “knife-edge”, with an operating loss of EUR30 million forecast for this year. In 2002, An Post made

an operating loss of EUR17 million and incurred a EUR52.5 million exceptional charge after it laid off 1,100 people.

SDS has continued to rack up losses, despite an estimated turnover of EUR65 million and a EUR12 million investment four years ago in a the state-of-theart automated distribution centre on the Naas Road.

An Post is also considering closing down the Naas Road centre and moving to a cheaper site in the midlands,with the 150,000 square foot Dublin site fetching possibly between EUR23 million and EUR27 million.

Athird option involves shutting down SDS as an autonomous unit, and amalgamating parts of its business with An Post. SDS’s commercial book, which accounts for about half its turnover, could be spun off to the private sector.

“An Post needs to goback to the drawing board with SDS. It’s a complete drain on resources,” said one source.

SDS remains overstaffed, according to industry sources, even though it shed 114 jobs last year. Curtin last week refused to be drawn on whether SDS should be sold.

An Post is in discussions with trade unions about workplace changes that could result in 1,450 redundancies.