Hungarian Post CEO sees no chance for privatisation

Hungarian Post CEO sees no chance for privatization; revenues, profit above plans in 2004

Budapest. October 7. INTERFAX-EUROPE – The pre-tax income of the state-owned Hungarian Post will likely reach HUF 5.1 billion this year, which is HUF 3 billion more than planned and exceeds last year’s figure by HUF 2 billion, CEO Pal Szabo announced according to MTI.

The Post recorded revenues of HUF 104 billion in the first eight months of 2004, and expects to reach HUF 155 billion by the end of the year, HUF 15 billion more than a year earlier and also above the company’s business plan.

Of the extra revenues, financial income accounts for HUF 2.5 billion, as the company’s business plan was calculated with 7.5% interest on the firm’s investments instead of the 10-11% it actually realized.

The organization’s savings generated an additional HUF 1.5 billion, while increasing demand for value-added services boosted revenues by another HUF 1 billion. On the other hand, the delivery of pension payments continued to be a loss-making activity, to the tune of HUF 1 billion for the year to date, the CEO said.

Operating profit will be around HUF 4.5 billion in 2004, HUF 1 billion more than both the planned figure and profit in the base period. The company plans to pay a total of HUF 1.7 billion in bonuses to employees this year as a reward for better-than-expected results.

The company hopes that its owner, privatization agency APV, will accept the Post’s 2005 business plan before the Christmas holidays. The CEO forecasts HUF 160 billion in revenues for next year, with pre-tax profit remaining at this year’s level. Following negotiations with the finance ministry, the CEO believes that service prices may rise by 4.5% from January.

The company will lay off 650 employees this year instead of the earlier announced 1,000, Szabo added. Similarly, the Post planned to reduce the number of post offices it operates on its own to 2400 this year and 1600 by the end of 2005, but now it appears the number of post offices will remain at 2800 for both years.

CEO sees no chance for privatization

Szabo declared that he sees no chance for the Post’s privatization in the coming 3-4 years, neither to a financial nor a strategic investor. The market of postal services will be liberalized as of 2009, from which date any EU-based company active in postal services may operate in Hungary as well.