South Africa: Post Office to Spend R 2,6 bn
The South African Post Office planned capital expenditure of R 2,6 bn on new and existing infrastructure over the next three years to continue current growth, it said yesterday.
Newly appointed chairwoman Vuyo Mahlati told senior employees, union representatives and the media yesterday that the Post Office would more than double its capital expenditure in the coming year. The money would go to building new post offices, upgrading others and improving access to information technology (IT).
“We are happy to announce we will increase capital expenditures from R 300 m in the last financial year to R 892m (this year),” she said, announcing year-end results in Johannesburg.
This would increase to R922m in 2009 and then drop to R800m in 2010, once plans had been met.
Chief financial officer Nick Buick said the investment would be split 60 pct-40 pct between building and improving property infrastructure, and increasing access to broadband and information and communications technology.
The government contributes about R300m annually to the Post Office, and had committed to this figure for the next two years at least.
This money was to subsidies meeting the needs of rural South Africans.
A further R 200 m for this purpose would come from the Post Office’s cash resources – currently at R 4,5 bn.
Acting CEO Motshoanetsi Lefoka said yesterday the group had built 47 new post offices and upgraded 48 in the past year.
The increased capital expenditure between now and 2010 would largely go towards rectifying “legacy” issues. Buick said when the group had not made a profit in the past, the provision of facilities to rural areas had been held back .
He said this should be completed by 2010, after which capital expenditures figures should normalize at about R800m.
Each post office branch serves just under 14,000 people, with the optimum figure being closer to 10,000.
Lumkile Mondi, chief economist at the Industrial Development Corporation, said the increase in capex would also allow the Post Office to capitalize on new services including Postbank, and increase broadband access in rural areas.
The group, which runs operations including the national postal service, a financial arm called Postbank, and courier services, announced trading profit of R470m for the past financial year.
This was an 85 pct increase over the previous year’s R254m, largely due to increased mail volumes and new operations including the performance in Postbank, which showed a 21 pct growth in new accounts for the year. A 78 pct growth in Mzansi savings accounts took total deposits in the bank to R 2,6bn.
Revenue increased 8 pct to R 4,9bn on the back of increased mail volumes. Lefoka said volumes had risen 7 pct, compared with the international standard of 3,3 pct.
The group had given addresses to 1,9-million South Africans who did not have them, Lefoka said. Using global positioning technology, the group had exceeded its original target by 300,000 new addresses.
1 British Pound (GBP) = 14.61709 South African Rand (ZAR)
