An Post 'needs to change direction' as losses mount at the mail provider
Rising costs meant the semi-state plunged €17 million into the red last year.
AN POST’S NEW chief says the mail company needs to ‘change direction’ if it is to weather the growing decline in traditional mail delivery and stem its losses.
David McRedmond said a recent increase in the price of a stamp has stabilised the company’s short-term finances but growing losses reported last year showed “the direction of travel for An Post needs to change”.
The latest financial results, detailed in the semi-state’s annual report, showed the volume of letters being sent in Ireland had dropped 40% since 2007.
Despite the decline, mail and parcel deliveries still make up the biggest chunk of An Post’s overall turnover. In 2016, traditional post generated sales of more than €512 million for the state-owned group.
“The digital world is closing one door with e-substitution of mails and online banking, while opening another into the world’s largest industry of shopping through e-commerce,” McRedmond said.
The new An Post chief executive – who was appointed to his role in October – said the company is focused on improving its package-delivery services.
“Parcel delivery will be at the core of what we do to ensure that a customer in Ballina has the same global access to goods as a customer in Boston or Barcelona,” he said.
An Post CEO David McRedmond
‘Very disappointing’
Despite booking sales of more than €825 million, An Post delivered a “very disappointing” financial result for the year ended 31 December 2016, according to the annual report.
Costs grew by €18.4 million to €839 million, which the company blamed on one-off expenses and a Labour Court-recommended pay increase of 2.5%.
As a result, the company reported a loss of almost €17 million for the year. This is compared to a loss of €2.4 million during the previous 12-month period.
That was despite the general election in February 2016 providing some extra cash for the company. Revenue generated through political flyers and letters was up six times on the previous 12-month period to more than €14 million.
An Post also contributed its weak performance to losses incurred by its universal service obligation (USO), which means the company must provide a postal service to every household in Ireland for every working day of the year.
Despite the disappointing results, the company said it was “very welcome” to see increased revenue from areas like foreign currency transactions – up 7% to €8.3 million – and banking transactions – up 4.6% to €10 million.
An Post said this “demonstrates the potential that there is in the network to offer relevant financial service offerings”.
Stamp prices
In July 2016, the price of a stamp increased from 70c to 72c, which the company said still left Irish prices “well below the European average”.
“Pricing policy in Ireland, whereby prices have been kept lower than in peer nations, has negatively impacted the group’s finances,” the company said.
However, An Post said it was a “welcome development” that the price was increased again to €1 in April 2017.
The company said there has so far been no indication that the price increase has further accelerated the downward trend in traditional mail.
