An Post records losses of €25m

AN Post had pre-tax losses of €25.6 million in 2009 in what it called its most commercially challenging year ever. Profit before tax in 2008 was €39.9m.

The massive fall in profits were due to €10m losses at Postbank and a €20m pension charge. It said its pension scheme fell well short of meeting the necessary minimum funding standard, despite its deficit reducing to €403m last year from €582m in 2008.

However, An Post made a €5.7m operating profit for 2009 on a turnover of €804.2m, down 5.4% (€45.8m) from €850m in 2008.

The company is planning to launch a range of consumer products in the coming year, including a low-cost mobile phone.

A 10% fall in traditional mail volumes meant turnover fell 5.4% to just over €804m.

It said the sales hit was mitigated by a rise in retail revenue as demand for post office-based financial services drove high levels of growth. Operating costs were reduced by €20.3m in the year to €798.5m.

Chief executive Donal Connell said the difficult year was reflected in a significant downturn in mail volumes and revenues.

“We are aggressively addressing the economic downturn and the challenges of the fully liberalised mails market.

“We are further improving our offering to mail customers and promoting the use of mail to Irish business, particularly the SME sector,” said Mr Connell.

It said in order to realign the company structure with the changing size and demands of the business, it announced it was necessary to reduce staffing levels by 1,375 full-time employees by the end of 2012 through ongoing processes including voluntary severance and early retirement.

In the year, customers invested an additional €1.8 billion in state savings products operated by An Post on behalf of the National Treasury Management Agency. It said this product range is now set to expand with the introduction of the National Solidarity Bond, to be sold through An Post.

Earlier this year An Post and its partner BNP Paribas wound down its Postbank joint venture. Following on from this, the One Direct and PostPoint businesses reverted to being wholly owned by An Post.

It said work has already been undertaken in preparation for full market opening in January next year.

Chairman John Fitzgerald said that An Post has shown its ability to withstand the difficulties of what was its most commercially challenging year ever.

“An Post is responding to the challenges and opportunities presented by the economic downturn. We are tackling falling mail volumes and changing mail formats by being the nation’s leading supplier of high quality, low-cost mails and retail services.

“This focus on cost efficiency and the determination to build upon the service improvements already made bode well for An Post in the coming years,” he added.