Irish An Post chief faces challenge

With 45pc of letter post revenue open to competition by the end of the year, and An Post’s announcement of its biggest ever loss of 70.5m with a continuation of losses in the current year, incoming An Post chief executive Donal Curtin faces many challenges.

Turnover increased by 9.4pc to 683.7m but operating costs rose by 10.8pc to almost700m in 2002. The 17.4m operating loss is augmented by a provision of 52.5m for avoluntary severance and early retirement programme.

Even though this restructuring plan is running 18 months behind schedule, the full provision has been made for 2002.

Losses were incurred at all An Post’s major activities including letter post, which wasboosted to the tune of 13.6m through elections and referenda business. There was even a 376,000 loss from An Post’s share of joint venture and associate business.

Turnover at the post office network rose from 107.6m to 125.2m, while turnover at theSDS parcels business improved slightly, to 80m.

During 2002 a programme to restructure the post office branch network commenced with the conversion of 86 sub-post office contracts to postal agencies which provide socialwelfare payments and postage stamps where a sub-post office cannot be sustained.

An Post also reached agreement on the conversion of 50 company-staffed post offices to contract status by 2005.

The Post Office transaction services (PostTS) business won a price increase for social welfare payments and increased volumes. As a result, losses were reduced from 13m in 2001 to 1.2m in 2002.

The cash position of An Post has deteriorated over the past few years from 203m in2001 to 26.8m at the end of 2002 primarily as a result of capital investment of almost 200m in automated mail centres in Dublin, Athlone, Portlaoise and Cork. Savings from these facilities should increase as the Cork facility becomes fully operational.