Crippled An Post plans property sell-off
The company confirmed last night that it intended selling off property valued at €13m this year and €14m in 2004 as the beleaguered management attempt to stem crippling losses at the semi-state company.
However, sources in the company have revealed that new chief executive Donal Curtin has ordered a review of all its sites to see if more buildings and land can be sold off. The plan is to raise up to €50m in total.
A large site in the centre of Cork, the present sorting centre at Eglinton Street, will be the first property to go under the hammer, at a price approaching €10m. This, it is hoped, will happen within the next few weeks as a new mail centre at Little Island outside the city comes on line.
An office building in Blackrock, South Dublin, has also been earmarked for sale. The company has buildings and lands worth just over €150m. An Post recently announced total losses for 2002 of €70m, an €18m operating loss and a €52m exceptional restructuring charge for redundancies and early retirement.
But the crisis is expected to deepen, with further trading losses of €50m predicted for this year and €20m in 2004. With 1,500 redundancies planned, exceptional charges are expected to put the losses into orbit before the company is back in the black by 2005.
The drive to reduce staff numbers has already begun and cuts will be sought in each department of the company.
The company employs just over 10,000 people, with wages accounting for €412m of total turnover of €683m.
An Post also believes it can produce additional savings of €10m by cancelling management bonuses, banning air travel and cutting 75% of its capital expenditure budget. Management has been criticised for signing off on €775,000 in fees and bonuses to its directors despite the scale of the losses being known from late last year.An Post chief executive John Hynes, who stepped down ahead of the publication of the annual report in July, was bullish about the income projections for 2003. Officials in the Department of Communications are said to have disagreed and insisted on the need for a recovery plan earlier this year.
A delay in allowing an increase in the price of stamps and confusion over when pay increases under the national agreement were to be introduced are being blamed by some within An Post for adding to the crisis.
