An Post 2001 Financials
An Post Reports First Losses Since 1991 back to news list
26 – Jun – 2002
The An Post Group annual report reveals a loss before taxation of €6.7 million on its operations in 2001, compared to a profit in 2000 of €9.8 million. The operating loss is the first reported by the group since 1991.
While group turnover went up by just over nine per cent to €625 million during the year when all three business divisions experienced a rise in revenues, these were outstripped by a 12 per cent increase – to €631.6 million – in total operating costs.
Other factors contributing to the losses were a delay in securing an increase in the basic postal rate which was at 1990 levels until April 2002. Fees for the delivery of welfare benefits through post offices remain at 1996 levels and need to be raised, the report insists.
Company chairman Stephen O’Connor said that a 13.4 per cent rise in staff and postmasters’ costs – which account for 70 per cent of group costs and which were fuelled by pay increases under the PPF – was mainly responsible for the cost growth.
Obligations under the PPF will cost the Group €80 million when fully implemented. The combined effect of the growth in costs and the absence of price increases was mainly responsible for the losses.
A recovery plan, to restore the Group to profit by the end of 2004, includes the achievement of savings, the shedding of 1,140 jobs and the introduction of new work practices. It also envisages the spending of €21 million on restructuring in 2002 and €32 million in 2003.
Mr O’Connor warned “No business can sustain a position where its costs exceed its revenues particularly when the outlook, without remedial action, is for a continuation of this trend and a widening of the gap between costs and revenues.”
The annual report, which is published today (June 26), shows that revenues in Letter Post, the mails business division, increased by 8.6 per cent to €399 million. Revenues in the Post Offices division grew by 2.3 per cent to €107.6 million while the parcels and courier distribution division SDS increased its turnover by 4.5 per cent to €78 million.
Mr Hynes said the company had lost €15 million on revenues of €288 million from obligatory postal services reserved from competition. €11 million of this loss arose on a turnover of €32 million from inbound postal services within the reserved area. Obligatory services open to competition generated profits of €8.4 million. Post Offices division lost €13 million.
Both Mr O’Connor and group chief executive John Hynes stressed the importance to the group of achieving price increases in its mails and Post Offices divisions: the group must “vigorously pursue and implement justifiable and overdue price increases.”
They confirmed that An Post is seeking a basic postal rate of 45 cent and that it has started to implement the government approved package of measures to bring Post Offices division to a position of break-even.
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