Irish postal operator AnPost managed to stay in the black last year despite a 7% drop in mailvolumes and is pressing ahead with restructuring and cost saving measures.
The state-owned company reported a group operating profit of €2.2 million for 2011, down from€5.8 million in 2010. Group profit after tax was €347,000 in 2011 compared to a loss of €24.6million the prior year, which had been due mainly to a €20 million one-off charge.
Group turnover rose fractionally to €807 million, driven by strong performances in the retailand subsidiary businesses, the growth of new revenue streams and stringent ongoing costcontrol.
Savings of €15.4 million in pay costs were achieved through more efficient working arrangements,increased use of automated mail processing and a full-time equivalent (FTE) staff reduction of 300by way of voluntary exit schemes, non-replacement of staff, overtime reduction and work processchange. This brings the total FTE staff reduction within the core business to 1,100 since2008. The next phase involves a further employee FTE reduction of up to 1,500 by end2016.
Overall mails-related revenue totalled €535 million, a fall of €17 milion on 2010. Core mailvolumes fell by 7% in 2011, mainly due to the economic situation bringing the overall decline incore mail volumes to 23.5% since the peak of 2007. The company is forecasting a further 7%decline in 2012.
The impact of this unprecedented volume decline on the funding of the Universal ServiceObligation (USO), whereby customers can avail of nationwide delivery and collections, five days aweek, for a uniform price, is now a priority issue for the company.
“The impact of this unprecedented decline in mail volumes has resulted in a serious andunsustainable shortfall in USO funding, jeopardising both the future of the service and theviability of An Post’s wider operation. Without necessary and overdue price adjustments, thissituation will continue to deteriorate,” An Post warned.
An Post has made application to ComReg, the Commission for Communications Regulation for anincrease in the basic 55c tariff later this year. In 2011, An Post delivered to 100,000 moredelivery points than in 2007, the year in which the basic tariff last increased.
Turnover in subsidiary companies including One Direct, the Gift Voucher Shop and the UK-basedAir Business reached €84 million, a 24% increase on the prior year. The Retail business continuedto perform strongly with revenue of €171.6 million, in line with 2010.
An Post Chairman John Fitzgerald said: “This is a time when all the company’s key stakeholdersneed to work together to ensure its future viability and that An Post reaches its full potential. Astrong and stable mails and retail infrastructure, trusted as it is by Irish and internationalcustomers, is an essential support to the process of economic recovery,” he added.
An Post Chief Executive, Donal Connell described the 2011 results as very solid, given theextent of difficulties facing Irish business due to the ongoing economic situation. “The process ofadapting the business to the commercial realities of the marketplace continued apace throughongoing change implementation, innovation, strategic investment and cost reduction programmes. Thisis a tough business nationally and globally.”
He added: “It is essential that the serious issue of funding the USO be resolved. The USOis a vital piece of national infrastructure, central to the business and community life of thecountry and a key facilitator of economic activity including new business innovation.”
