“Substantial” reforms bring Latvian Post back into profit

Latvian Post has turned around its loses in the first nine months of this year, making a LVL 1.33m (EUR 1.91m) profit after tax in its first three quarters. The postal operator, which faces the full opening of its domestic postal market from January, achieved a LVL 27.5m (EUR 39.5m) turnover in the nine months to the end of September, a 4.2% increase on the same period in 2011.

Latvian Post made a LVL 400,000 (EUR 575,000) net loss in the first nine months of 2011, on revenues of LVL 26.4m (EUR 38m).

The company said its turnaround came because of “substantial” reforms made following the appointment of a new board in January.

Some of the key improvements have been a restructuring and the ending of duplicated functions within administrative operations. The company has also succeeded in disposing of underused property.

Latvian Post said it has also succeeded in introducing “advanced” new services and improving existing services, and mounted a campaign to bring in new customers and attract former customers that had been lost in previous years.

Māris Kleinbergs, the Latvian Post chairman, paid tribute to the effort of his staff in improving the financial performance and efficiency of the company in 2012.

“Today Latvian Post is operating ready for full postal market competition from January 2013,” he said. “Nevertheless there is still much work to be done, because our aim is to continue enhancing the mail service offerings to make it more convenient for our customers.”

Pilots

Latvian Post, which employs more than 4,300 people and has 600 locations in its network, has been struggling with its profitability for some years, but for the full year in 2011 the company did achieve a LVL 700,000 (EUR 1m) profit, the first annual profit at the company since 2004.

Kleinbergs said the next step for his company was to continue various pilot projects to make mail services more customer-friendly in Latvia.

He said: “We’re looking at this through a number of pilot projects, such as the delivery of parcels to Statoil filling stations, which has been a successful collaboration that we plan to continue to develop and expand.”

Latvian Post launched its pilot with Statoil back in August, allowing customers shopping through mail-order catalogues to have parcels delivered to seven locations in Riga is they could not be at home to receive their packages.